When most people retire, they want to get two things out of their retirement nest egg: They want to know that they can live comfortably and independently for the rest of their lives, and they want to leave something behind to pass on to loved ones. If you’re fortunate enough to live comfortably for the rest of your life and still have money left over, the last thing you want is for Uncle Sam to take a big slice of what’s left before your money goes to your loved ones – but that’s exactly what happens. This is the ultimate bait and switch, and most people aren’t aware there’s an ideal solution to get around it. Let’s explore the best way for your loved ones to avoid getting taxed on their inheritance:
How do you help your heirs?
- You need a solution that protects you and them: To ensure neither you nor your heirs face a big tax liability, you want to put your money into an investment product that serves as a tax shelter for both you and them. Whatever you do, you cannot forget about you; while you’re still alive, you’re living on a fixed income, and you need to protect your own tax liability.
- A whole life insurance policy protect both parties: The ideal tax shelter that meets the needs of both you and your heirs is a whole life insurance policy. When you invest in a whole life insurance policy, you’re entering into a private contract with a mutually owned life insurance company – a private financial arrangement that Uncle Sam has limited ability to tax. Because a whole life insurance policy has a death benefit, your loved ones also are sheltered, as Uncle Sam generally does not tax death benefits paid out by life insurance policies.
- A whole life insurance enables you to pass on a bigger inheritance: When you invest in a whole life insurance policy, you’re reducing your tax liability, which means that you have more money to pass onto your loved ones when you die. Meanwhile, when you reinvest the dividends of your whole life insurance policy, Uncle Sam cannot tax your dividends at all – further building your wealth.
As we age and depend increasingly on others for companionship and care, we want to reward those who are there for us by passing along an inheritance to them. To avoid incurring big tax liabilities, you need a whole life insurance policy to protect both you and them – a solution that ultimately helps you to pass on a bigger inheritance.
Don’t let your heirs get taxed.
For more information about how you can use a whole life insurance policy to protect both you and your heirs from hefty taxes, visit Paradigm Life’s free eCourse here.