Money Talks....

So on this issue of Money Talks….did you know that you can use life insurance to help fund your retirement?  The concept is call Deferred Compensation using life insurance.  So, we are going to do a case study, then tomorrow we will show demonstration using the information from the case study.

For our case study we have a 33-year-old male, super preferred non-tobacco.  Super Preferred is the best rating that you can get.  He will make a monthly premium of $200.00 a month for 37 years.  Total premiums from now to age 70 is $88,800.  The initial death benefit is $100,000.   During this time the cash inside the policy will grow tax deferred.  At age 70, the death benefit has grown to $424,711.  The cash inside the policy has grown to $324,711.  At age 70 we stopped paying premiums.

Earlier today we did a Facebook Live and in there we talked about the 3 stages to retirement.   The go-go stage:  you are just retired and going and doing all the things you couldn’t do before because of working.  Traveling, seeing friends, visiting children and grandchildren.  The slow-go stage: you still go but not as much as the years before.  The no-go stage: you aren’t going anywhere.  Everyone comes to see you.  We try to get you the most retirement money during the go-go stage.

So, at age 70, he would be able to pull out of the policy $36,624 for 15 years tax-free.  Total for the 15 years would $549,360.  This is a supersize Roth Ira.  There are NO income levels.  On a Roth IRA a single person MAGI must under $144,000 for tax year 2022. That doesn’t apply to life insurance.

There still life insurance in place after pulling out over $500k.  You put in $88,800 but pulled out $549,360.  This is a great plan to check into: there is money if you live: retirement money, there is money if you die: beneficiaries received the death benefit, money if you became disabled:  waiver of premium continues to put in monthly premiums to age 70.

Watch Facebook Live as we demonstrate these numbers. 

Until next time,

Diane