If you’ve started planning for retirement, you may consider Social
Security to be an important source of your retirement income. And, you
may already know that the sooner you start collecting your monthly Social
Security benefit, the smaller each check will be. If you’re considering
retiring early and plan to start receiving Social Security at that time, you
might be concerned about the lower monthly benefit. Even if you aren’t
planning on retiring early, you may be worried about your ability to
maintain your standard of living in retirement. If so, you’re not alone. The
Employee Benefit Research Institute indicated in its 2023 Retirement
Confidence Survey Summary Report that only 18% of today’s workers
feel “very confident” that they will have the ability to live comfortably in
retirement.1
The good news is this: You may be able to implement a strategy today to
give yourself an alternate source of income in retirement. It’s called Social
Security Maximization with Life Insurance — and it involves using
permanent life insurance to provide supplemental retirement income
through loans and withdrawals against the policy’s cash value.2
This valuable planning strategy offers you several advantages:
You may begin collecting Social Security whenever you wish, while still having a higher amount of income in retirement.3
Your policy's cash value will grow tax-deferred.4
Withdrawals and loans are income tax-free up to the sum of the premiums paid. Loans in excess of the premiums paid are not taxable while the policy is in force.
Contact Sam Lingo at Lifetime Financial Growth so that together, we can explore how this strategy may help you have more flexibility when it comes to your retirement income—and valuable death benefit protection for your loved ones.
Disclaimer:
1 Source: Employee Benefit Research Institute and Greenwald Research, 2023
Retirement Confidence Survey, EBRI Chartbook (Employee Benefit Research
Institute), April 27, 2023
2 Supplemental income from a whole life policy comes from loans and withdrawals.
Normally, cash values accumulate over the long term. Policy benefits are reduced by
any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are
affected by policy loans and loan interest. Withdrawals above the cost basis may
result in taxable ordinary income. If the policy lapses, or is surrendered, any
outstanding loans considered gain in the policy may be subject to ordinary income
taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like
withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is
under age 59½, any taxable withdrawal may also be subject to a 10% federal tax
penalty.
3 The timing of the receipt of Social Security benefits is a complex subject. The best
date to take benefits will vary, based on a number of factors. These materials do not
cover all the options you can and should consider, but only address making up a
shortfall should you elect to choose to initiate your Social Security benefits before
reaching full retirement age.
4 Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or
accounting advice. Consult your tax, legal, or accounting professional regarding your
individual situation.
This material is intended for general use. By providing this content The Guardian Life
Insurance Company of America and your financial representative are not undertaking
to provide advice or make a recommendation for a specific individual or situation, or
to otherwise act in a fiduciary capacity.
© Copyright 2024 The Guardian Life Insurance Company of America.
Pub10168IN (05/24)
2024-174229 (Exp. 05/26)