Do you think Social Security will give you a reasonable amount of money to live on after age 65? I hate to burst your bubble, but the numbers are just not there for those of us a decade or more away from retirement. In particular, I mean to address this to the children of the Baby Boomers, who may be coming into some inheritance as that generation begins to pass on. If you have, or have not, started to save for retirement, putting a good block of that inheritance away in a tax advantaged account, will go a long way to securing your financial future. The more you put away the better your retirement will be, but the bottom line is “something is better than nothing”, so put something away! And, if you are like me, and don’t want to retire, ever, then this will make your later years that much more enjoyable! The idea of having to go to work when you are 70 and still living paycheck to paycheck is not an attractive vision.
I have just been introduced to a couple strategies which allow clients to put more away than in their traditional retirement savings plans. One even allows them access to those savings TAX FREE! The way it works is: You take out a Permanent Life Policy, then, overfund the premium, as much as possible within the limits. The Tax free accumulation in the separate cash value adds to the base Death Benefit, keeping your Death Benefit increasing. When you turn 65, you stop paying into the policy, and for 20 years begin withdrawing money monthly. The first dollar rule is in effect, so you get all your premiums paid back, tax free, and then from there, you take a policy loans on the full death benefit annually to keep that income coming. While they do charge for the loan, certain carriers will credit you back the same amount so the net cost is 0. When you pass away the loans are paid back, and the remainder is paid to your heirs as a death benefit. Instead of paying $14000 into your SEP or 401k put that money into a permanent life insurance policy, and don’t pay tax on the proceeds!
If you are a high income earner, and set this up on auto pay, you will be surprised as to the significant numbers this strategy can generate for your retirement, while protecting your family as well. The one catch seems to be you have to be 50 or younger to give yourself time to compound the market returns and grow sufficient value to make this work. That, or put even more away in your overfunding. Buy Better Insurance, and let me show you what it would look like? If you have questions, contact us through my websites; http://www.farmersagent.com/ctrowbridge.
