Permanent Life Insurance Gaining Momentum in Retirement Plan Strategies
MORRISTOWN, NJ - 12/16/2015 (PRESS RELEASE JET) -- Baby boomers who reach age 65 this year can expect to live 20-30 years in retirement, thanks to longer life expectancies. For seniors just heading into retirement knowing they have a few more decades to pursue their interests and enjoy more time with family, the prospect can be quite inviting. With this kind of longevity in mind, many retirement advisors are turning to the practical benefits that permanent life insurance can provide, both during the working years and into retirement.
Once used as a tool for estate planning or wealth transfer only, permanent life insurance—also known as cash value insurance—has experienced an increase in popularity as a financial tool among individuals over 50 to cover newly acquired mortgages and other financial obligations. It can also be a great source of supplemental retirement income.
Permanent insurance, like all insurance plans, has its pros and cons. Premiums are usually higher than term coverage initially, but the younger the policyholder, the greater the potential for long-term savings and benefits. And, since permanent insurance accumulates a cash value, the policyholder may be able to borrow against it tax-free to pay for things like education costs or to use as a cash source in retirement.
Most retirees don’t need life insurance after they retire unless they have dependents, need to provide for a spouse or need to fund funeral costs, in which case a permanent policy might be a sensible option.
According to registered investment advisor Kevin Saia of S Squared Retirement Solutions, LLC, permanent life insurance can make sense for individuals looking to to create liquidity in order to meet immediate or short-term financial obligations, such as federal estate taxes. He also recommends permanent life insurance to clients who may be concerned with asset protection in states with laws in place to protect the cash value and death benefits of insurance policies from creditor claims.
For some, permanent life insurance provides an aspect of compulsory saving that can be appealing, particularly in today’s low interest rate environment. For retirees who worry about depleting their children’s inheritance every time they draw money from the account, a small portion of the available funds can be designated for spending, and a survivorship permanent policy with a no-lapse guarantee can be set up to make sure that children will receive the intended bequest.
“With so many goals to achieve and an increasing number of retirement years to arrange for, it’s never been more important to begin retirement planning early,” Saia says. “If it hasn’t already been discussed, I recommend that anyone with concerns about their post-retirement income ask their retirement advisor whether permanent life insurance makes sense for them.”
Many people find traditional retirement vehicles to be sufficient for their retirement needs, but for those retirees who wish to maximize tax-free income during their retirement years, permanent life insurance can be an attractive supplemental strategy. Good tax planning should reduce one’s taxes while they are living and after death. Permanent life insurance provides the potential to do both—build up a tax-deferred cash balance within the policy, and transfer assets income tax- and estate tax-free to beneficiaries.
Media Contact
Company Name: S Squared Retirement Solutions, LLC
Name: Kevin Saia CFP® CRPC®
Phone: (862) 251-4700
Email Address: ksaia@s2retirementsolutions.com
Website: http://www.s2retirementsolutions.com