Is a Permanent Life Insurance Policy Right For Your Retirement Savings?

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The life insurance retirement plan, and LIRP, has been successfully used by millions of Americans over the years to secure and strengthen their means of living during their retirement and beyond, and has proven to be a solid financial investment instrument that delivers solid results every month. The LIRP enables a person to convert their life insurance policies into an easily-absorbed investment option that grows tax-deferred until distribution. This tax deferment also makes investing in the LIRP an excellent way for retirees to ensure their long-term financial security after they leave the workforce. In fact, research has shown that LIRPs are far more stable than other investments such as bonds and mutual funds and tend to offer higher returns than stocks and mutual funds on average. As a result, LIRPs are a great long-term investment vehicle for retirement planning and provide solid cash flow and significant tax savings. To understand the terms tax-advantaged status, read this article.

In terms of retirement plans in general, the best retirement plans are those that provide solid financial security from pre-retirement to retirement. Unfortunately, for most people, this isn't always possible. For instance, many people purchase life insurance retirement plans when they are young and relatively healthy, and then struggle to maintain these plans once they retire. Unfortunately, this leads to financial security issues that can cost a person a great deal of money down the road.

This is where the LIRP can make a tremendous difference. By putting money into an attractive lirp, you can begin reaping the benefits of tax-free income at retirement while maintaining the safety and stability of your current lifestyle. In addition, because the proceeds from a lirp are tax-free after distribution, your expenses will be much lower than if you had taken the money out of your 401(k) or IRA and reinvested it. In this way, life insurance retirement planning can provide significant long term financial security without the high level of taxation that comes with other types of plans. Additionally, the tax-free income from a lirp can make large monthly contributions to your savings, which can help you maintain extra spending power throughout your retirement.

Many people who have struggled to save enough money for retirement also suffer from a lack of savings culture, which means that they take the funds they receive from their insurance policies and invest them in the stock market instead of saving those funds for retirement. Unfortunately, by doing so, they do not build the wealth they need to provide for their future. This is where mutual funds and other investment vehicles can make a significant difference in your long term financial security. When considering the purchase of a life insurance retirement plan of any kind, it is important to understand how the value of the policy itself is determined. Most policies contain a death benefit that will pay off the death benefit should the insured die. A term life insurance retirement plan generally has a level of investment in the investment instruments that it offers, but it will payout only the death benefit should the insured pass away within the defined term. Some policies provide cash reserves that will allow them to make large lump sum purchases, but these types of policies also carry higher fees and charges than traditional policies that offer no or low investment options. In order to determine the amount of capital gains you are entitled to when withdrawing money from your retirement account, you must calculate the present value of your account using the current date and subtract your investment in the lirp. This amount is called the investment return on your policy, or APR. Any amount of money that exceeds the investment return on your permanent life insurance policy will be taxable income. You may also want to consider the additional tax benefits of withdrawing money from a lirp, as well as the tax benefits of withdrawing money from an IRA. Discuss these options with your financial advisor to determine which type of lirp is right for your retirement savings goals.

Check out this post for more details related to this article: https://www.huffpost.com/entry/time-to-check-your-life-insurance-policy_b_59c1d4a4e4b0f96732cbca49.