Supplemental Retirement Planning
Using Whole Life Insurance

Hedge Against Market Volatility

I see most clients invest their retirement savings into the stock/bond market and/or the real estate market. Unfortunately, as most all of us have experienced recently, there is no such thing as a 'risk free' investment. There is volatility in any type of investment where you hope to earn something greater than what banks typically offer. If you have a need for life insurance, and choose a highly rated insurance company like Guardian, whole life can provide a consistent, growing pool of cash values. When considering this pool of cash values along with the other, more traditional, retirement accounts, volatility will be reduced. While dividends from mutual insurers are not guaranteed, companies like Guardian have a solid track record of paying competitive, tax favored dividends that when combined with the typical guaranteed interest, provides a very competitive return.

Call today to find what the current dividend rates are!

Tax Diversification

When I counsel clients for retirement planning, not only must we look at how to accumulate funds, but we must also consider how these funds will be distributed and the potential income taxes associated with distributing retirement assets. Under current tax law, retirement accounts such as 401(k), 403(b), IRA, will be subject to ordinary income rates. Real estate, stocks, mutual funds are subject to Capital Gains taxes. (Roth IRAs are distributed tax free, however, there are contribution limits and income eligibility limits which reduce the possibility of accumulating substantial amounts.) Our country's history has shown that income tax law changes frequently. Wouldn't it be nice to be able to have a substantial pool of assets that if distributed, would be considered tax free? Under current tax law, if structured properly, amounts withdrawn or loaned from whole life insurance is income tax free. Creating a tax free pool of assets allows retirees to have, what I call, 'tax diversification'. If ordinary income tax rates and capital gains tax rates are relatively high, clients can distribute retirement income from their whole life insurance policy until the federal government and/or a new president decides to change things... again.

Call today to see how whole life insurance could provide tax diversification for you!

Increased Tax Favored Savings Limits

Qualified Plans, IRAs, Roth IRAs and most all forms of retirement savings have limits on what the participant can contribute. Once a client reaches these limits, there are very few types of accounts that allow additional deposits that are also tax favored. Whole Life Insurance has very high contribution limits and does not consider your other forms of retirement savings. Therefore, I often advise clients that once they reach their contribution maximum to their 401(k) or similar plan, to consider whole life insurance as an additional vehicle to save more tax favored dollars.

Call today to see how much you could deposit into whole life insurance!




Read Thomas Lloyd's Other Articles


Should You Buy Term or Whole Life Insurance?
Top Ten Things to Ask Your Agent BEFORE Purchasing Life Insurance
What Company Do I Choose - Mutual or Stock?
Whole Life Insurance for the Small Business Owner
Whole Life as a Retirement Account Diversifier
Does Permanent Insurance Make Sense?
Why Whole Life Insurance from Guardian
Whole Life or Universal Life - Which Type of Permanent Life Insurance Should You Buy?
How Much Life Insurance Do I Need?
Whole Life Insurance for Kids
Whole Life As Part of Your Financial Plan
Life Insurance... The Reality
What is a Dividend?
Using Life Insurance to Leverage a Financial Gift
How To Accelerate the Cash Value Growth Within a Whole Life Policy
Modified Endowment Contract (MEC)