LIRP

The Life Insurance Retirement Plan

A Life Insurance Retirement Plan, or LIRP, is a powerful financial tool that can help secure your retirement years. Here’s what you need to know.

Who can set up a LIRP?

Anyone can set up a LIRP, but it is typically most beneficial for those who have maxed out their other retirement savings options, such as 401(k)s and IRAs. It can also be a good choice for those who want to leave a legacy for their loved ones.

Pros of a LIRP

One of the biggest advantages of a LIRP is that it offers tax-free income in retirement. Additionally, the money in a LIRP is protected from creditors and can be passed down to heirs tax-free. It also has no contribution limits and can be accessed penalty-free before age 59.5.

Cons of a LIRP

One potential downside of a LIRP is it can take several years for the policy to start earning returns. Finally, it is important to choose a reputable insurance company and agent to ensure the policy is structured properly.

What age is best to start a LIRP?

The earlier you start a LIRP, the more time your money has to grow tax-free. However, it can still be beneficial to start a LIRP later in life, especially if you have maxed out your other retirement savings options.

How do taxes affect LIRP?

Because a LIRP is funded with after-tax dollars, the money grows tax-free and can be withdrawn tax-free in retirement. Additionally, because the money is passed down to heirs tax-free, it can help reduce or eliminate estate taxes.

Conclusion

If you are looking for a way to secure your retirement years and leave a legacy for your loved ones, a LIRP may be worth considering. However, it is important to do your research and choose a reputable insurance company and agent to ensure the policy is structured properly. Contact us today, at Wealth Financial Services & Products at 754-202-2300 or visit our Get a Quote, to set up a consultation.