Whole Life As A Retirement Income Strategy

Whole Life As A Retirement Income Strategy

Life insurance includes benefits that can generously compliment a financial plan beyond the death benefit – especially when purchased while still young and healthy.

During retirement years, it is likely there will be some ups and downs in the market – having the ability to pull from a non-correlated asset class after those ‘down years’ can have a powerful and positive impact on an overall portfolio.

A properly funded whole life policy can be an attractive option, offering guaranteed tax-deferred growth that can provide a stable source of supplemental retirement income through tax free loans and partial surrenders – and the tax-free death benefit will assure the legacy to a family.

Let’s look at a hypothetical example based on today’s dividend rates, for a healthy 30-year-old female contributing $500 per month over a 10-year period into a whole life policy. Over this 10-year period, a total of $60,000 was contributed into her plan.

> If she passes away prior to retirement (at age 70) – there will be a $613,029 tax free death benefit passed on to the beneficiaries.

> If she wishes to supplement her retirement income starting at age 70 over a 15-year period:

  • She could withdrawal $28,594 after tax income each year
  • That’s a total of $428,913 after tax income for 15 years
  • Still, after all that income there will be a tax free death benefit of $248,432 at age 85

As any advanced mountain climber will tell you, getting back down a treacherous slope is just as important, if not more so, than going up. It’s not necessarily about having the most assets – it’s having balance in an overall portfolio to generate the most income from the assets. By managing the income phase of retirement, it can give your clients the opportunity to live the retirement they have dreamed of.

To learn more, contact a life insurance expert today.