Retirement is something that most of us look forward to. It's an opportunity to take a break and enjoy the fruits of our labor by going on vacation, doing hobbies, and spending time with family and friends. However, planning for retirement can be quite difficult; you need to secure sources of income that will last after your full-time salary ends. One sensible solution is life insurance, which offers many advantages, as per William Schantz, over traditional methods of creating retirement income such as 401(k) plans or Savings Bonds.
Life insurance provides a unique and effective way to generate income during retirement, says William Schantz. Life insurance policies provide death benefits that can be used for specific needs like funeral expenses or as an inheritance for loved ones. They also have the potential to grow cash value over time, making them a valuable asset for retirees looking for supplemental income sources.
When you purchase life insurance, you are essentially buying coverage from an insurer in exchange for a set amount of money called the premium. This money goes toward paying claims when eligible beneficiaries make a claim against your policy following your death. As long as you continue to pay the premiums, your policy remains active and covers its full death benefit amount.
The cash value of life insurance is one of the greatest advantages for retirees. Cash values grow with each premium payment, and the amount of growth depends on the policy you choose. Many life insurance policies offer dividends or bonus payments, allowing for additional growth over time even when premiums are not being paid. This cash value can be used to supplement retirement income either in lump sums or as a steady stream of income throughout retirement.
Another key benefit to using life insurance in retirement is tax relief. Withdrawals from a permanent policy are generally tax-free up to the number of your premiums paid and any growth in cash value resulting from additional payments or bonuses received. This advantage can help stretch income further while also reducing taxes that may otherwise be due during retirement.
Overall, life insurance provides an important source of income for retirees due to the flexibility of cash value growth, death benefit payments, and tax-deferred withdrawals. According to William Schantz, it offers available solution to those in need of extra retirement income that is not subject to market volatility or other risks associated with traditional investments. For these reasons, life insurance can be an effective way to supplement retirement savings and help you reach your long-term goals.
There are many different ways to plan for retirement, and life insurance is one option that can provide retirees with peace of mind, says William Schantz. A life insurance policy can help to supplement other sources of income, such as Social Security or a pension, and it can also be used to cover final expenses or leave a financial legacy for loved ones. If you're thinking about how to best secure your financial future, talk to your advisor about whether life insurance makes sense for you.
