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Dane Petchul (949) 854-3001  | Michael Alongi 
(949) 282-3726            

Tax-Free Savings Strategy

When it comes to saving for retirement, it’s not just about how much money you can accumulate, but you also need to consider the amount of taxes you will have on your retirement income.  Most of your income ends up being subject to federal, state, Social Security, Medicare, and, in some cases, local or city taxation.  That’s why it’s so important to know all of your available options when it comes to saving for your retirement.

A financial vehicle with three tax benefits

A universal life insurance policy offers you the peace of mind of a death benefit protection, but also offers you a combination of three tax benefits that other financial vehicles do not:

  1. Tax-free death benefit
  2. Tax-deferred cash value accumulation potential
  3. Tax-free distributions

Given today’s economic realities and the awareness in knowing that taxes are likely to increase, this financial vehicle is more beneficial than ever before.

  1. Tax-free death benefit

The death benefit is the main reason you should purchase life insurance.  It ensures the ones who depend on you to be able to maintain their standard of living if something should happen to you. 

When your beneficiary (or beneficiaries) is properly named, the death benefit passes to them income-tax-free and can be used for many different financial needs such as:

  • Income replacement for the primary wage earners
  • Mortgage and other debts
  • Supplemental college funding
  • Business succession planning
  • Estate tax coverage
  • And much more!
  1. Tax-deferred accumulation

A universal life insurance policy also can build cash value which has the potential to grow income tax-deferred.  When you don’t have to pay taxes on your policy’s accumulation that, in turn, gives you the potential to build more value faster.

  1. Tax-free distributions

You also have easy access to take withdrawals and loans out from your cash value income-tax-free.ⁱ And this amount can be used for anything you choose – supplemental retirement funding, financial emergencies, college tuition, weddings, vacations, and much more.