Tax Free Retirement Payments

There are two methods to produce tax free retirement payments with annuities.  One method is to convert a traditional IRA account into a Roth IRA.  Roth IRAs are forever tax-free.  So for example, if you have a Roth IRA that is placed inside of an annuity with an optional Income Rider, which may enjoy 10% guaranteed growth per year when it’s time to begin withdrawing payments, those monies will come to you forever tax-free.  That financial benefit is potentially enormous.

The other method is to create an Indexed Universal Life Insurance (IUL) policy that grows very much like an Fixed Index Annuity.  That product will enjoy explosive growth AND provide an immediate enhanced death benefit.  Allowing the policy to grow in the index enables the base benefit amount to receive healthy growth that never goes down in value.  Gains are locked in on an annual basis, and at some future date, you can access those funds tax-free.

Case Study: Dennis & Diane

Dennis and Diane are both 50 years old.  They want to retire at age 60 and have approximately $500,000 in savings.  They want the $500,000 to be used to generate the highest possible income for the remainder of their lives.  An Indexed Universal Life Insurance policy was created that grows very much like an indexed annuity.  In this case study, after 10 years of growth tied to an index such as the S&P, Dennis and Diane retire at 60, and their annual income from the IUL Policy paid out at $126,000/year for the rest of their retirement, and more importantly, tax-free.  The policy also carried an enhanced death benefit of approximately $1.5 Million.