Supplementing retirement income with whole life
Retirement your way. That’s what whole life insurance can offer you — a versatile and flexible financial vehicle to help provide for your loved ones while possibly supplementing your retirement income along the way.
None of us know how long we’ll live, and that uncertainty can make planning for retirement difficult. You don’t want to take a pay cut or reduce your lifestyle during your retirement years, but traditional retirement vehicles can constrain your income level. Some of these vehicles impose annual contribution limits, or restrictions on when or how much you can access without incurring a penalty.
Whole life insurance spans your lifetime, so it can help eliminate some of the guesswork around protecting loved ones while maintaining a place to tap into funds to supplement your retirement income.1 Whether your retirement looms in the distant horizon or in the near future, whole life allows you to take the long view, providing you with a built-in cash value that you can tap into if and when you need it.2
Whole life isn’t just a valuable death benefit for you and your loved ones. It can also provide a valuable “living” benefit for your retirement life. The cash value in a whole life policy can do more than cover emergencies. Unlike some financial vehicles that place restrictions on withdrawals, you can withdraw money from a whole life policy at any age, for any reason, without penalty, as long as there is sufficient cash value accrued in the policy. Whether you use it to help downsize your home, or to offset medical expenses, the choice is yours.
Additionally, whole life policies don’t have a maximum contribution limit. You choose your contribution limit based on your individual retirement needs, wants, and policy size. Used in combination with other retirement assets, such as 401Ks, IRAs, and annuities, whole life can contribute to building a comfortable retirement portfolio, all while offering the additional benefits of tax-deferred growth.3 Additionally, it’s not considered part of the Social Security taxation formula.
Plus, if you don’t want or need to access your whole life cash value, you can live through your retirement years in confidence — spending down other retirement assets knowing you can still leave a legacy to your loved ones through your policy’s guaranteed death benefit.
Tackle retirement income uncertainty
Whole life can assist you in bridging the gap you may face when it comes to protecting retirement income. Consider these financial realities:
- Social Security pays an average of 40% (for medium earners) of what retirees made during their working years.4
- It’s estimated there are only enough Social Security funds to pay 80% of scheduled payments after 2035. 5
- Chances are you’ll spend 20 years in retirement, the length of time for the average American.6
- You may want to consider saving for at least 25 years of retirement at your desired percent of salary, be it 75%, 85% or even 100%, based on your retirement plans.
Protect your retirement vision
Saving for retirement requires a careful balance between assets and protection. Whole life policies can offer both, helping you live the retirement you’ve always envisioned. Incorporating whole life into your retirement portfolio now will help prepare you for whatever the future holds.