Life Insurance for Retirement
Can life insurance supplement a 401(k) retirement plan?
Life insurance can supplement a 401(k) retirement plan by providing tax-free income in retirement through policy loans. Permanent life insurance (whole life, IUL) builds cash value that can be accessed tax-free. This strategy is used when 401(k) contribution limits are reached.
Key Points
- Life insurance supplements a 401(k) by providing tax-free income
- Permanent life insurance: builds cash value accessible tax-free
- Policy loans: access cash value without triggering income tax
- Used when 401(k) contribution limits are reached
- An independent agent can help you evaluate life insurance as a 401(k) supplement