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May 24th, 2012 by

When you’re making decisions that will affect how you live during your retirement, it’s vital that you do your best to keep emotions out of the picture. When people start to get worried that they aren’t going to have enough to retire, they tend to spend less of their money. It’s a natural reaction and, on the surface, it seems like a good approach. What a lot of people don’t realize is that discretionary spending has been one of the major factors that helped life this country out of previous recessions.

Making Retirement Decisions TogetherNow, I’m not saying that it’s a good idea to be careless with your retirement assets. You have to safeguard your money as much as you possibly can if you expect to continue enjoying your current standard of living after your retire. However, when the general public becomes unwilling or unable to spend, it weighs down economic growth. It’s not just a matter of fear, either. A lot of people simply have less to spend during this recession than they had before its onset.

It’s hard to predict how long it will be before consumers regain the financial strength and confidence to go back to their old spending habits. Until the general public regains its confidence, we are going to continue to see a slow economic recovery.

Plan now to have a lifetime stream of income that you can never out live.

Contact me at 833-313-7233 for a free consultation

May 17th, 2012 by

Why Opt For A Life Insurance Policy?

Let’s assume that you’re sixty-five and you have $300,000 in an IRA and it is not needed for retirement. Let’s also assume you’re in a 35% tax bracket. So, actually, you  only own 65% of your $300,000 IRA, or approximately $195,000, because 35% will go for taxes. What if you withdrew the IRA today and paid the taxes? The remaining $195,000 could be used to purchase a single-pay life insurance policy with a death benefit of $750,000. That means you won’t have to pay monthly payments to the life insurance policy and every penny of that $750,000 would pass tax-free to your beneficiaries.  What’s more, life insurance offers protection if you die prematurely. Plus, it provides a lump sum cash amount for emergencies and tax-free retirement income if desired.

If you were to leave the $300,000 in your IRA and you continued in the tax bracket of 35%, your IRA would have to grow to $1.1 million to provide your loved ones with the same $750,000 after taxes. At age 65, you can assume you have approximately twenty years to live. When doing the math, your IRA would have to grow at a compound rate of 7% just to equal the life insurance benefit.

Another approach utilizing a life insurance policy would include using your life insurance to pay the equivalent Roth IRA conversion taxes after your death. Rather than converting to a Roth IRA and paying the tax lump sum now, a more affordable strategy would be to purchase, with installment payments, a life insurance policy with a death benefit equal to what the taxes on your IRA will likely be in 20 years. That allows you to convert your IRA to a Roth but pays your taxes after your death.

A life insurance policy can be a tool you use to manage your money wisely. So, let’s talk more about what you need. Contact me directly at 833-313-7233 for a free consultation so I can help you keep your money SAFE!