When its time to retire, we like to introduce the concept of SLIRP or Supplemental Life Insurance Retirement Planning. Your banking policies, in addition to all the other benefits they offer, can absolutely help you fund your retirement using this SLIRP method.
But what do you want it to look like when you retire? What do you want out of your retirement strategy?
If you’re like most, you’d want predictable, steady, and tax-free income, right?
Well, the cool thing is, you don’t need to have a separate policy designed when you retire. If you have one already, you can use it for every other need you currently have before retirement, and you can use it in retirement as well.
So what does using this banking policy look like in retirement?
It starts with an accumulation phase and transitions into a distribution phase in retirement. This means you’ve spent all those years accumulating cash value inside your policy, now, in retirement, the idea is to start distributing it to yourself and enjoying the fruits of your labor.
How do we do this? It can be done in one of two ways.
1. Take withdrawals from your policy up to basis. Then, switch to taking loans.
We would never encourage withdrawals for regular use of your banking policy. However, retirement presents a unique situation where this could work. Not everyone is concerned with repaying what they borrow after they retire because they are retired and may no longer have a goal of accumulating cash value. Furthermore, they may not care whether or not their death benefit is depleted.
With this strategy, our clients are able to withdraw cash value up to basis, or the total amount of premiums deposited into their policy. You cannot take more out in withdrawals than you put in via premium “deposits” or you may be taxed. So, at that point, they begin taking the rest of the cash value out using loans.
2. Borrow from your policy’s cash value only using loans.
Taking loans also offers tax free advantages and the death benefit is left untouched by withdrawals, unlike the previous method.
If you’re struggling to find the right retirement strategy for you using your banking policy, your mapping specialist will be able to offer some insight. They will create a custom retirement design for you, a process that’s actually quite simple.
The only question is, when are you going to retire? When you know, let your mapping specialist know so they can help you in the most efficient way.
If having a healthy retirement fund is a goal of yours, email us at [email protected] to get started with your banking policy.
And don’t forget to send your loved ones to www.TheMoneyMultiplier.com/member-area so they can retire well, too.