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Tax-Free Retirement


  • Provide an income tax-free death benefit for the people who depend on you

  • Defer taxes as your accumulated cash value grows, and

  • Potentially access that cash value using income tax-free policy loans and withdrawals, to use for retirement income or other needs

Strategies to Save For Retirement

When you save on a before tax basis, such as a Traditional IRA, your contributions are tax deductible. The trade off is all income received is taxed as ordinary income.


If you make a withdrawal prior to age 59½ you may incur an additional 10% penalty. This leaves you exposed to potentially higher future tax rates.

If you believe taxes are going up this could be devastating to your retirement income. In this example, you are taxed on the harvest. On the tax-free side, in our example of a Roth IRA, the contributions, i.e., (the seeds), are taxed before they are deposited and both the contributions and earnings may be tax-exempt3, thereby insulating you from possible future tax rate increases.


After Tax Strategy

when you set aside a portion of your after tax income into an account earmarked for retirement. Taxes are paid annually on any earnings. An example of this type of savings is a Certificate of Deposit.

Tax-Deferred Strategy

when you set aside a portion of your after tax income for retirement, earnings on the account grow tax-deferred. When retirement income is taken, taxes are due on the tax-deferred gain. A Non-Deductible IRA or an annuity is an example of this type of savings.

Pre-Tax Strategy 

Might include an Employer sponsored qualified plan, like a 401(k) plan. You don’t pay current taxes on contributions made to the plan and earnings grow tax-deferred. Later when you take retirement income the benefits are income taxable.

Tax-Free Strategy

Is similar to the Tax-Deferred Strategy: you set aside a portion of your after tax income, and earnings grow tax-deferred. Retirement income is received income tax-free. A Roth IRA is an example of this type of savings. Another type of financial vehicle is permanent life insurance.

If you were a farmer, would you rather be taxed on the seed or the harvest?

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