Tax-Free Retirement Income

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Want to know how to create tax-free retirement income? Our insurance professionals have been working with individuals to mitigate tax implications for a virtually tax-free retirement. Unfortunately, we do not get to stop paying taxes when we stop working. A lot of retirement income can still be taxable, even if it is not directly from employment. However, not all income is subject to federal taxes. You could potentially avoid paying some federal income taxes on various types of retirement income. There are many strategies to remember to implement when you want to get as close to having a tax-free retirement as possible. Our independent insurance agents will answer all your questions about tax-free retirement strategies. Contact us today for personalized help!

<strong>Tax-Free Retirement Strategies</strong>

Tax-Free Retirement Strategies

There are a wide variety of tax-free retirement strategies. We work with individuals and businesses on reducing tax implications. It can be wise to utilize numerous tax-free retirement strategies to make the most out of your potential income sources. No one actually enjoys paying taxes, but once you are done earning from work, any amount you owe in taxes will come directly from your retirement savings funds. Make the most out of the tax-free retirement strategies that are available to you so that your retirement funds can do what they are supposed to do, fund your retirement. Tax-free retirement strategies include contributing to a Roth IRA, using a Health Savings Account (HSA), purchasing municipal bonds, capitalizing on long-term capital gains rates, owning a permanent life insurance policy, using annuities, and considering the tax implications of your Social Security benefits. Of course, every individual retirement portfolio looks different. Since your situation is unique to you, it is best to work with an insurance professional to determine what works best for you and your needs.

<strong>Tax-Free Retirement Contributions</strong>

Tax-Free Retirement Contributions

In order to have tax-free retirement contributions, you must use a tax-deferred retirement account. Although contributions are tax-free now, your taxes are owed at the time of withdrawal. Therefore, making tax-free retirement contributions to a tax-deferred retirement savings account only prolongs the inevitability that you will owe taxes eventually, which may not be right for you. On the contrary, if you contribute to a tax-exempt account, withdrawals are tax-free in retirement.

<strong>Tax-Free Retirement Account Qualifications</strong>

Tax-Free Retirement Account Qualifications

A Tax-Free Retirement Account or TFRA is a retirement savings account that works similar to a Roth IRA. Taxes must be paid on contributions going into the account. Growth on these funds are not taxed. Unlike a Roth IRA, a tax-free retirement account doesn’t have IRS-regulated restrictions for withdrawals. If you are likely to be in a higher tax bracket at retirement, then a TFRA is an excellent way to mitigate tax implications. Tax-free retirement accounts also come with a feature called a “floor.” Your funds in a TFRA are indexed to the market, not actually in the market. So if the market goes up, you are credited with a gain. But if the market drops, you do not suffer from a loss. Unlike many other retirement savings accounts, a TFRA is not limited by IRA restrictions, so it allows access to funds. Other retirement savings vehicles tend to have limited if any, liquidity. Tax-free retirement savings accounts have benefits for chronic, critical, and terminal illnesses, similar to long-term care plans. They also have a permanent death benefit. TFRAs are specially designed life insurance plans which use tax laws to their advantage. The permanent death benefit begins on the first day the plan is in effect. Unlike qualified retirement plans, a TFRA does not limit contributions. It must, however, adhere to the rules and laws of life insurance.

<strong>5 Ways to Get Tax-Free Retirement Income</strong>

5 Ways to Get Tax-Free Retirement Income

  • Roth IRA or Roth 401(k) – Roth IRAs and Roth 401(k)s have tax-free qualified withdrawals at retirement since taxes are paid on contributions.
  • Municipal Bonds Income – A fixed-income investment that generates interest payments that are typically exempt from federal taxes.
  • Health Savings Account (HSA) Withdrawals – After an individual reaches 65, funds in an HSA can be used for general non-medical purposes without penalty.
  • Life Insurance Cash-Outs – An individual can generally withdraw parts of the cash value in a whole life policy to generate retirement income.
  • Social Security Benefits – Depending on your income level, the Social Security Administration may deem you eligible for non-taxed social security benefits.


Tax-Free IUL Savings Tool

Safety of Principle:

  • Your Money is NOT invested in the Stock Market
  • Your Money is NOT Subject to volatility
  • Your Money is NOT exposed or subject to investment risk
  • Your Money is NOT Subject to investment loss
  • All annual growth is LOCKED-IN permanently & CANNOT depreciate in value.

Tax Consequences:

  • Your Money grows TAX-FREE
  • There are NO Taxes when you retire & withdraw your money
  • There are NO Taxes when you die
  • There are NO Taxes when you pass your money to your family

Access to Your Money:

  • You CAN ACCESS your money whenever you need it
  • There are NO early withdraw penalties
  • You DON'T have to pay it back


  • There is NO limit on how much you can contribute to your plan on an annual basis (Up to MEC limit)
  • There is NO age restrictions on withdraw


  • Charges are a fraction of the expenses & administration costs of a traditional qualified plan. 

Effects on Social Security:

  • Allows you to gain MAXMUM value of the benefit.
    No Means Testing

Lifetime Income:

  • If properly structured, account value will assure lifetime income.

401K - IRA - Pension

NO Safety of Principle:

  • Your Money IS invested in the Stock Market
  • Your Money IS subject to volatility
  • Your Money IS exposed and IS subject to investment risk
  • Your Money IS subject to investment loss
  • All annual growth is NOT LOCKED-IN permanently & CAN depreciate in value.

Tax Consequences:

  • Your Money grows TAX-FREE
  • You PAY Taxes when you retire & withdraw your money
  • You PAY Taxes when you die
  • You PAY Taxes when you pass your money to your family

Access to Your Money:

  • You have LIMITED ACCESS to your money
  • You PAY early withdraw penalties
  • You HAVE TO PAY it back


  • There IS a limit on how much you can contribute to your plan on an annual basis (Set forth by IRS).
  • There IS an age restriction for withdraw


  • Significant fees charged to cover investment expense and the administration of the account, even if the account depreciates in value.

Effects on Social Security:

  • Plan benefits are counted as ordinary income, thus lower benefits.
    Will be Means Tested

Lifetime Income:

  • Because of TAXES, FEES and market volatility - lifetime income cannot be achieved.

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"The New Rules of Retirement Savings"

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