Retirement planning is about mixing life policies, annuities, and possibly other options to provide for a person’s retirement income. The best time to start planning this is in your early to mid-forties for a sound retirement plan.
The first thing we look at is your social security income and what it is expected to be. This is generally $1250-$2500 for the primary and about half for the spouse if the primary’s spouse draws.
The next is any 401k, Simple, or IRA that you have already got. These can also be used to help fund other forms of retirement planning on a 1035 exchange. These options are highly tied to the stock market, so when the market is up, the member is happy; when the market goes down, then the member loses and is very unhappy.
The following form of retirement is actual life policies in the form of the various Universal Life Policies:
Universal Life is a policy that is permanent and earns a little bit more interest than whole life, usually around 4.5-6%. These are the start of the excellent retirement vehicles, although, with this policy, it can be said to be questionable as to whether it is or not. This policy pays the death benefit and the cash value to the beneficiary. These policies can also have living benefits.
Guaranteed Universal Life Is the next Permanent life, and it earns about 6% interest and can be an okay retirement policy. This policy pays the death benefit and the cash value to the beneficiary. These policies can also have living benefits.
Indexed Universal Life policies, when structured right, will give you a share in the up-side of the stock market without the downside. These can earn between 0%-13% in interest on average, although it usually is about 6% on average. These are the best retirement vehicles out there besides annuities, especially when structured right. They pay both the cash value and the death benefit to the beneficiary. These policies can also have living benefits.