As we approach the end of Life Insurance Awareness Month (LIAM), it’s fitting to bring up one more financial benefit provided by Participating Whole Life Insurance policies.  Specifically, the exit strategy.  A properly designed PWLI policy should provide you tax exempt income when entering your new phase of retired life.  Ideally, this saving for retirement via the PWLI policy starts early in life, but you can still take advantage of the benefits in your later years.

No matter your age, for now let’s imagine you are going to attempt to climb Mt. Everest and you need to choose between two guides; do you choose the guide with a track record of getting climbers to the top of the mountain, or the guide known for getting you safely back to camp?  Your answer could help determine your preferred way to save and plan for your passive income years.

Similar to our imaginary Everest adventure, we have to decide what is more important to us with regard to our retirement funds.  Is it the total balance in the account, or the amount we have left once it is withdrawn?  Qualified plans, while being tax deferred, are still subject to taxes at the most important time.  And the Roth IRA may not be subject to taxes (for now), but the investments are still subject to market risk.  Why take the risk of not getting off the mountain when you have a guide that can help you avoid both taxes and market corrections?

LIAM is coming to an end, but the daily game/challenge of managing your finances continues.  When considering your options for saving and investing, remember the flexibility and guarantees provided by a properly designed PWLI.  We’re already on the mountain.  Let’s make sure we make it back to camp with stories to tell.