Whether you are just starting out in your career or beginning to plan for the days beyond it, there are many things to consider when planning for a confident retirement.
With so many events in the world and economy over these past few years, you may have concerns about whether what you saved would be enough to retire – or enough to last. More and more often, Americans are beginning to tap into their Social Security benefits earlier than before.1 While Social Security benefits are one way to fund retirement, there are others to consider as part of your larger strategy.
You’re likely familiar with many of the traditional ways to save for retirement, such as a 401(k) or IRA’s. But did you know that whole life insurance may be another way to help save while providing you and your family financial protection through its death benefit?
Whole life’s cash value benefit accumulates over the life of your policy² and is insulated from the market fluctuations that can impact other ways of saving. You can use it for whatever reason you may need during or before retirement³ and is not considered as part of the Social Security taxation formula.
We're sharing this helpful infographic to help explain, and we'd love to connect with you to discuss this concept more and offer some guidance.
² Some whole life polices do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s third year. Talk to your financial representative and refer to your individual whole life policy illustration for more information
³ Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.
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The Path to Retirement with Whole Life Insurance
| September 30, 2022