Often people are faced with multiple financial problems that have to be solved with limited money resources. You may be wondering: How can I save for retirement and still protect my family with life insurance and myself for long-term care needs? Perhaps, we should take a look at a workaround.
Consider using a product that offers the following:
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Accumulate cash reserves similar to a Roth IRA; The contribution is not tax-deductible, but grows tax-deferred and is returned, if effectively designated, as tax-free income.
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Offering the availability to access cash for long-term care needs with a definition similar to traditional LTC insurance.
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Provide a supplemental income for a period of years or for life at retirement.
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And, by the way, it offers a hefty tax-free benefit to your family down the road… just in case you don’t make it.
Can this really be fixed? Yes it can, but most people would laugh at me and say that the product is not competitive in the financial market. I am sorry to disagree with that assessment. It is not only competitive, but it is a sure money product. Let me briefly illustrate.
A 40-year-old man, in good health, could earn an IRA-level premium ($5,000 per year) from now until retirement at age 67, and can earn tax-free supplemental retirement income of more than $20,000 for year for 20 years; have access to cash for long-term care dollars; and give his family a sizable benefit in the event he dies on the road to retirement.
The key issues in any financial planning are flexibility and efficient resolution of multiple problem areas. These attributes are fundamental elements of this planning tool.
Can you offer a single alternative that does all of these things? Would it surprise you if I told you that this solution is possible with a permanent life insurance plan? Okay, are you ready to make fun of me and tell me about the lack of competitiveness in life insurance?
Unfortunately, permanent life insurance is often overlooked as part of the solution to a financial plan that includes retirement. What I often hear is “I’ll buy term insurance and invest the difference.” It could be a solid idea, but two things get in the way. Term insurance has an increasing cost; annual premiums that will rise beyond what can be defensible and an overall cost that will eventually dwarf the benefit. And, “investing the rest” often never happens or may not reach desired accumulation goals. What you end up with is a thank you from the insurance company for all those premiums paid and little or no savings. Maybe it’s time to take another look at clunky old permanent life insurance. It can be a very welcome addition to your overall retirement plan!