Create Tax Advantaged Retirement Income You Cant Outlive


Published on

What do you imagine when you think of your retirement? Perhaps you picture retirement like a long vacation: you’ll play golf, travel, or enjoy leisurely days by the pool. With good health, such a picture is entirely possible – as long as you take action to turn those pleasant dreams into reality!

In this guide, you’ll discover ways to protect your assets from the tax man and set up an income plan that ensures you’ll never run out of money – no matter how long you live.

Published in: Economy & Finance, Business
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Create Tax Advantaged Retirement Income You Cant Outlive

  1. 1. CreateTax-Advantaged Retirement Income You Can’t Outlive Protect your assets from the tax man and set up an income plan that ensures you’ll never run out of money – no matter how long you live.
  2. 2. Insurance Companies Don’t Just Sell Insurance • Enjoy the higher yields of a variety of stock market investments along with tax-free or tax-deferred gains. • These perks can all be found within venues that carry the added security of guaranteed death benefits or income for life – benefits that are lacking in traditional retirement plans.
  3. 3. Life Insurance Investing Let’s take a look at the various types of permanent life insurance policies for different investment goals→
  4. 4. Which InsuranceType is Right for You? It Depends onYour Investment Goals WholeLife A portion pays for life insurance. The rest builds cash value. Each month, the company pays you a fixed interest rate. The premium stays the same over the life of the policy. UniversalLife The interest rate paid is based on changing market rates. Riskier than whole life. Flexible—you can change the amount you pay monthly. VariableLife Similar to combining a brokerage account with your life insurance. Buy stocks, bonds, and other investments within the policy. Riskiest option.
  5. 5. Guarantees All of these policies have a death benefit, which is guaranteed to a point.
  6. 6. Whole Life Guarantees Since both the death benefit and the cash value are guaranteed, you’ll know from the quote what the contract will provide. The insurance company can tell you, “If you put X dollars in monthly, you’ll have $300,000 at age 65.” There is a set, guaranteed death benefit. The rate of return is also guaranteed so you’ll know what you’ll get when you retire.
  7. 7. Universal Life Guarantees The insurance company will estimate a range of dollars you could have by a certain age. Your actual amount could be more or less than the company’s estimate. The interest rate will change over time. This fluctuation is due to the market. Universal Life Guarantees
  8. 8. Variable Life Guarantees The company will make an estimate based on market trends. How much you accumulate depends on how well you invest your money. Typically, there are no guarantees to variable life insurance. Investing in variable life insurance is like investing in the stock market. Variable Life Guarantees
  9. 9. Tax Strategy— How to GetTax-Free Gains • Avoid CancellingYour Policy: • The money in your life insurance account grows tax-deferred.As long as you leave money in the account, you don’t owe taxes on it. • If you decide to cancel your life insurance policy and cash out investment gains, you’ll owe taxes on those gains. So avoid cancelling your policy! • Follow this process instead: • Get a policy loan. Luckily, the government doesn’t tax loans. • Let the death benefit pay off your loan. The government doesn’t tax life insurance death benefits.
  10. 10. If you use a life insurance policy as a tax-free investment, consider the downsides: • You’ll have to be healthy enough to qualify for life insurance. It might not be an option if you have serious health issues. There’s a required medical exam. • Your investment gains will be lower than if you had just invested in a stock account, because each month a little bit of your money goes towards paying for your life insurance.
  11. 11. How Can Life Insurance Investing Be Beneficial? It’s especially advantageous if you can’t qualify for a regular retirement plan: – For example, if you’re making too much money, you’re not allowed to use an IRA, so you could use life insurance. – If you don’t have a 401(k) at work, life insurance would be a great tax-free investment for you. – Life insurance doesn’t have any income restrictions, so anyone can set up a plan like this as long as they’re fairly healthy.
  12. 12. More Benefits of Investing in Life Insurance • If you want life insurance to protect your family, it’s an added benefit to be able to save for tax-free income later on all within the same contract. • If you struggle to invest regularly, permanent life insurance offers automatic, forced savings, ensuring that you provide for your future, even when you’re not thinking about it.
  13. 13. Annuity Investing • Annuities are investment contracts split into two stages: 1. Accumulation phase: when you put in your money monthly and it builds over the years. 2. Payout phase: when you begin to receive the money.
  14. 14. Risks of Fixed rate of return. You know exactly what you’ll receive. Lower risk, but you’ll earn less money. Variable rate of return. Interest payments depend on the market No guarantees of the amount you’ll accumulate. Fixed VariableAnnuitiesvs.
  15. 15. Top Benefit of an Annuity that Life Insurance Doesn’t Offer An annuity offers guaranteed income for the rest of your life.
  16. 16. Illustration of Annuity Payout • If you have $300,000 in your annuity and you’re ready to start the payout phase, you can choose to receive set, guaranteed payments for the rest of your life, and they’ll turn it into a lifetime pension for you. • No matter how long you live, you’ll continue to receive the payments.The amount of the payments will never go down, even if your total payments surpass that $300,000.
  17. 17. Life Insurance or Annuity: Which is Right forYou? Life Insurance • If you have children or need a life insurance policy • If you want to retire early (you can take out a loan without restrictions) Annuity • If your goal is to reach retirement with the most money • If you don’t qualify for life insurance • If you’re single, have no kids, and don’t need life insurance
  18. 18. 4Tax-Free &Tax-Deferred Income Strategies Now that you understand the basics of investing in life insurance and annuities, let’s review 4 specific strategies to achieve tax-advantaged income.
  19. 19. Strategy #1. Use Life Insurance CashValue forTax-Free Income If you only used your life insurance cash value to fund your retirement, all your income in retirement would be tax-free. As long as you keep your insurance policy in force, you can borrow money from it tax-free. You could borrow money yearly. Then, when you eventually die, the death benefit from your policy will pay off your loans so nobody else has to pay them.
  20. 20. Strategy #2. Use an Annuity to Guarantee Income for Life You can ask the company to turn your annuity into guaranteed payments for the rest of your life. So, no matter how long you live, you’ll receive the same amount of money per month. If you live to 120, you know you’re still going to be collecting checks. Remember, the main benefit of an annuity is guaranteed income.
  21. 21. Strategy #3. 1035 Exchange: Life Insurance CashValue into an Annuity With a 1035 exchange, you can turn your life insurance into an annuity. This transaction is not a withdrawal, so you won’t owe taxes. Then, you can set up your guaranteed payments for retirement.
  22. 22. Strategy #4. Use an Annuity + Life Insurance If he dies last, he continues to receive those higher payments. If you’re married, base the annuity on one partner to receive higher payments. For example, the husband. Have life insurance on the same partner. If he dies first, the wife gets tax free income from the life insurance.
  23. 23. Younger vs. Older Strategies 30s or 40s: Buy life insurance now.You’ll likely be healthy enough to qualify for an affordable rate. 60s or 70s:You might not be able to qualify at all. You can get the annuity at any time, but if you get it when you’re young and add funds to it on a regular basis, you have the advantage of letting your money work for you for many years of tax- deferred growth.
  24. 24. ComparingTax Advantages of the 4 Strategies • #1 is the only strategy that’s completely tax-free (life insurance). • #2, #3, and #4 delay taxes until retirement, which gives your investment more momentum to grow. • With #4 (life insurance + annuity), you’ll pay less tax, because the life insurance death benefit will be tax-free.
  25. 25. How CanYou Get Started? Discuss your desires for retirement. Meet with a life insurance agent. Get at least 3 quotes from different agents. Choose a company with A+ ratings from the A.M. BestCompany.
  26. 26. Setting up an annuity with guaranteed income is really the only way for most people to get income for the rest of their life. The question isn't at what age I want to retire, it's at what income. ~George Foreman
  27. 27. We hope you enjoyed your Special Report! Curtis Roese is an experienced professional with extensive experience in personal finance and small business matters. Curtis writes and publishes articles, courses, guides and special reports on his personal finance blog. Common Cents Wisdom is a website with hundreds of informative articles, special reports, resources to assist you with all of your financial concerns and a free monthly newsletter. Sign up to receive your free eBook "Common Cents" and get started today on the road to financial freedom!
  28. 28. This Free Course Includes:  A Complete 80+ Page, 16-Module Home Study Course in PDF format  Companion Worksheets and Cheat Sheets  Budget Helpers, Worksheets, and Trackers  Bonus Audio Interviews with Financial Experts  My Secret Resource List of Helpful Money Sites, Tools, and Calculators  Bonus #1: Boosting Your Value Without a Formal Education  Bonus #2: Building a Wealth and Prosperity Mindset  Bonus #3: 25 Ways To Protect Your Identity Don’t Delay! Get Your Free Course Now!
  29. 29. Sign Up ~ FREE Personal Finance Newsletter “Finally… A High-Quality, Content Rich, No BS Newsletter Written Specifically For Those Interested In Personal Finance” What you can expect to receive EVERY Month by signing up:  Special Report – 10 to 20 page in-depth report on Personal Finance topics important to you!  Articles to keep you informed on a variety of topics relevant to your financial freedom.  Action Guides, Worksheets, Resources & Buyer Guides!  Monthly Financial Calendar to keep you organized and current with managing your personal finances.  Periodic reviews of Products and Services – Real Financial Solutions ~ Real Fast!