Universal life insurance can do more than just help your family after you’re gone; it can boost your retirement income.
Would you rather pay tax on the seed or the harvest? That is the question that people should be asking themselves when thinking about investing for their retirement.
In most qualified retirement plans like 401k’s, IRA’s, traditional investment accounts you’re going to have to pay the piper at some point, there are NO free lunches! What happens with these type of qualified plans you wind up getting the instant gratification of a tax break up front, however on the back end during retirement is when you pay taxes on the harvest. Often time’s people find that their money won’t last as long as they thought into retirement.
There are many other financial tools available that might not be mainstream investment vehicles, but personally I like to take the Road Less Traveled and go my own way (thank you Robert Frost).
One of those financial tools is a specialized form of life insurance where you can get market like returns without the market risk and it’s called Index Universal Life Insurance. What!? Life Insurance!? You must be out of your mind! I don’t need life insurance; I don’t have kids or a family. These are the usual objections when the subject of life insurance comes up.
Most people don’t realize that the Index Universal Life insurance option exists let alone using it for it’s tax benefits and paying taxes on the seed instead of the harvest as distributions from this specialized insurance product can be taken out tax free.
I encourage you to think outside the box and do your homework on utilizing the Index Universal Life Insurance strategy. It could be just the thing you are looking for.
Anthony T. Dubicki has been a risk management and financial services advisor for the past few years.
You can find out more about his work, and his assessment on finances, here.