David Lerner Associates News

The Life Insurance Retirement Plan

Core Facts


Monday, November 5, 2018

Despite the new tax plan, many Americans are still looking for ways to save on taxes and increase income in retirement. The Roth IRA is one of the ways to do this, as it allows you to set aside after-tax income up to a specified amount each year, and both earnings on the account and withdrawals after age 59½ are tax-free.

If you set up a Roth IRA in your twenties or thirties and consistently put aside the $5,500 each year, compound interest will get you to your retirement goals with ease. There is, however, a catch. 

There are income limits of $135,000 for single people and $199,000 for married couples. So, if you’re earning too much for a Roth IRA, consider a life insurance policy as part of your retirement strategy.

With a whole life or universal life policy, there is an insurance component providing a death benefit and another tax-advantaged cash-building component that earns interest that can be tapped into while you are alive. This is called the cash value. There are implications for taking a loan on the cash value of your policy, so before you do it, get all the facts. Talk to a certified advisor.

The tax advantages of this strategy are a big attraction. You can access the principal you’ve invested and the interest earned tax-free, as long as you adhere to all the guidelines for withdrawals and loans. The bottom line is that if you’re a high net-worth individual, adding life insurance to your retirement income planning is something you should consider. 


IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. 

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com

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Contact

Jake Mendlinger
Account Manager
Zimmerman/Edelson
516.829.8374 X 232
jmendlinger@zimmed.com

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