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Can IRA Maximization help support your retirement goals?

Can IRA Maximization help support your retirement goals?

| September 12, 2022
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IRA Maximization: How to Use Life Insurance as an IRA Maximization Strategy

You’ve worked hard over the years to achieve the kind of success that will provide you with financial confidence in your retirement. As a result, you might find yourself with more assets than you need to provide a secure retirement. 

If you have an IRA or a qualified plan (401k, 403b, etc.) that you were intending to leave intact for the next generation, you may wonder about the best way to transfer that money to them. Fortunately, there is a way you can leverage those funds to provide your loved ones with even more money than they would have received from your retirement assets alone.

It’s surprisingly easy to do, when you use the IRA Maximization strategy. The IRA Maximization strategy involves using the money you are required to withdraw from your IRA or qualified plan account(s) each year to pay the premiums on a permanent life insurance policy that names your loved ones as beneficiaries. The end result?Your loved ones will receive more than they would have if you hadn’t purchased the life insurance.

Here are just a few of the advantages of the IRA Maximization strategy:

  • It gives you the ability to convert a taxable asset to a tax-free one: Through withdrawals to fund the premiums, you will slowly convert an asset subject to estate and income taxes to one received income tax free1 — life insurance.
  • You have the potential to save money on taxes: If the life insurance is designed properly (i.e., owned by a trust), estate and generation skipping taxes may be avoided.
  • There are potential cost savings: The death benefit payable to the trust upon your death (and ultimately received by your beneficiaries) will be excluded from your gross estate.

I’ll contact you soon so we can start to explore whether this is a solution you’d like to consider. My goal is to help you explore how you can make the most of your unneeded retirement assets for those who mean so much to you.

1 Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. Guardian® is a registered trademark of The Guardian Life Insurance Company of America, New York, NY. The Guardian Life Insurance Company of America (Guardian) New York, NY 10004-4025.

© Copyright 2021 The Guardian Life Insurance Company of America.

Pub10056IN-EM (8/21); 2021-124767 (Exp. 8/23)

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