Buying the right life insurance coverage with your future retirement in mind can make it easier for your family to handle finances when you die. It can also help protect your money, manage your taxes and give you the opportunity to grow cash value which you can use for a variety of needs and activities. Here are some tips for using life insurance as part of your retirement planning.
Permanent life insurance can help your retirement planning
Permanent life insurance offers you a death benefit and the potential to build cash value that can be used to help supplement your retirement income. Perhaps one of the most interesting aspects of permanent life insurance is the ability to access the cash value. Cash value is generally tax-free through a policy loan. Why is tax-free so important?
Lower taxes during retirement
If you use the cash value from your life insurance policy to help supplement your retirement income, you might be able to reduce the amount you withdraw from your retirement accounts. During retirement, withdrawals from these accounts are generally taxable as regular income. Taking income from both your retirement accounts and your life insurance policy could help keep you in a lower tax bracket.
What about if you need money before you reach retirement age? There’s no age requirement to use a policy loan from your life insurance. Policy loan funds from your life insurance policy can be used for any purpose. The same funds are also generally free from income taxes.
North American has life insurance products that can be a significant asset as part of your financial retirement strategy. To find out more about how permanent life insurance can help supplement your retirement planning options.
Curious and want to learn more about life insurance and retirement planning? Check out this video from our partners at North American
Have term life insurance already? Here is a great article explaining how to convert to permanent: https://thompsonagency.net/the-importance-of-term-conversions-tips/