Life insurance in the retirement plan
Retirement can be a long way off. It may be around the corner. Maybe it’s already here. With 401k, individual retirement plans (IRA) and pension plans available, why have life insurance in the retirement plan?
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Do you have a family and / or business?
If so, if you die before reaching retirement age, do you want to make sure that your family has a place to live, that your business can survive, and that your family or business does not have to struggle financially?
If you have kids, do you want to be sure that the college fund you have for them will have enough money for them to go to college, whether you’re here to see it happen or not?
What if everything goes according to plan, whether or not you have a family or a business?
Would you like to have a fund that you can access at any time? You may want to retire earlier. You may have a cash crisis.
Whether you die too soon or live too long, a permanent life insurance policy will allow you the flexibility to do many things that the retirement plans mentioned above do not, such as not receiving penalties for accessing it, and if it is structured properly, can be accessed tax free.
The cash value can be used to supplement retirement income or it could be the retirement plan itself.
At some point, we all die. When that happens, not only will you have had the benefits in life, but there will also be a tax-free death benefit for a beneficiary of your choice – your family, your business, or a charity, whoever it chooses.
Self-directed
Who would you rather have in charge of your retirement planning and life planning? Would you rather be the IRS or you?
There are self-directed retirement plans available, but if they are tax-qualified plans, they are subject to IRS rules and conditions.
Life insurance is not a tax-qualified plan.
As a result, it can be truly self-directed by the owner. It is not to say that there are no rules and conditions, but they are much more relaxed and there is much more flexibility in how much you can contribute and when you can access it.
Also, you can have more than one. You can use different policies for different purposes, including for retirement.
Pension
There was a time when people worked for a company for many years and upon retirement received a pension. Although they are not completely extinct, they have become rare.
Definition of pension plan according to an online dictionary:
“a fixed amount, other than salary, that is paid at regular intervals to a person or the person’s surviving dependents in consideration of past service, age, merit, poverty, injury or loss suffered, etc .: a retirement pension “.
Technically, life insurance is not a pension plan, but it can be used in place of an employer and can be offered by an employer or created by an individual for that purpose.
Call it whatever you want.
Why don’t you have life insurance in your retirement plan?