Life Insurance

Taxes in Retirement

Strategies for Taxes in Retirement

Tax-Free Retirement Options

How can I retire tax-free? By using certain Indexed Universal Life (IUL) policies, you may be able to receive income that isn’t taxable. Roth IRAs and Roth 401(K) plans can also be used to get tax-free retirement income. Depending on how you plan to retire, you might adopt additional strategies for taxes in retirement. A life insurance policy that offers max cash value to you could potentially provide you tax-free income.

Strategies For Life Insurance And Taxes In Retirement

portrait of happy couple with their arms around each other tax free retirement with life insurance fort worth tx

Life insurance is not typically thought of as a source of retirement income, but it can be. Generally, earnings on certain retirement accounts and investments must be taxed. Many accounts require you to pay taxes when you withdraw money. IULs, however, are not taxed the same way as other life insurance policies. In reality, an IUL does not actually invest in the stock market though it can be linked to an index. As a result, your money is not at risk either. Therefore, an IUL may provide retirement income tax-free. All policies have certain conditions and terms. Get in touch to find out what options are available to you regarding taxes in retirement.

Is It Possible To Retire With An IUL?

Our team at Hybrid Financial can work with you to determine if an IUL may be a good option for you. Additionally, we can review any current policies you may have and identify the next steps. Below is a list of questions to consider. 

  • Will taxes be higher in the future? 
  • Can offset rising taxes in retirement in my strategy?
  • Is there a tax burden on my beneficiaries? Is there a way to minimize the impact?
  • What amount of tax-free* money do I have set aside, if any?
  • What would I prefer: to pay taxes now or to pay taxes at possibly higher rates later?

Discover Your Options

There are several benefits to indexed universal life insurance (IUL). We cannot predict what future tax rates will be. We also don’t know how those rates may affect your retirement. You can, however, make a plan. It might be worth exploring IUL insurance. Many retirees have confidence in employing an IUL as part of their tax strategy. Their money principal remains safe from market decline, and their income is tax-free.

couple meeting with financial advisor to learn about life insurance and taxes in retirement fort worth tx

To learn more, attend one of our “Greenline” or “Tax-Free Retirement” workshops.

You can also contact our office for a no-cost, no-obligation consultation. We can help you with strategies for taxes in retirement and life insurance policies.

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