101 Best Tax Free Income Retirement Planning Florida
Life insurance contracts are afforded special treatment under United States tax laws.
For instance, the death benefit is tax free.
Funded with after tax dollars, the life insurance contract’s value will grow tax deferred until death of the insured, in which case the entire amount can be handed down free of any taxes to the next generation.
Any withdrawals taken from a life insurance contract are tax free up to the total amount of the cost basis (the amount of money put into the policy) with the gain being considered the last part of the contract to be withdrawn for tax purposes (FIFO accounting).
These attractive tax benefits make whole life insurance a popular savings and estate planning vehicle for wealthy individuals.
If you’re at least 10 years from retirement and have a healthy cash flow and a need for life insurance coverage, a properly structured whole life insurance policy can be a helpful tool to increase your tax-free income in retirement.
Accelerate the premium payments over the first five to seven years and then let the money potentially grow tax-free for another five to seven years just before retirement.
You get tax-free access to the policy’s cash value through withdrawals and loans.
For very-high-income people who have maxed out their 401(k) plans, IRA and Roth IRA options, a whole life insurance savings strategy can make sense, especially if they have a need for life insurance. Another viable option for high-income individuals could be the use of a tax-deferred, nonqualified annuity if they don’t have a need for life insurance.
If you are in a high tax bracket, are risk-averse and will be happy with bond like returns, you should look at whole life.
Because the plans can be complicated and may have high fees, make sure you talk to your financial advisor before moving forward.
Mintco Financial Tax Free Income Retirement Planning in Florida
Mintco Financial has been working with friends and neighbors throughout the greater Tampa Bay area to help them work toward their financial goals through the use of insurance and investment products. We are rooted in the community and have developed our business by creating close, personal relationships with our clients. When you have financial concerns, we want to help you address them.
Call us today to schedule a complimentary meeting at 813-964-7100
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