Despite the conflict and chaos happening around the globe, we are holding our heads high here at Rejoice Tax Resolution, LLC. Why? Because we worked our tails off for our Columbia, SC clients this year.
We helped a lot of people save on taxes — deductions and strategies they wouldn’t normally have taken had they not listened to our advice. It’s a privilege to make so many people’s lives just a little bit easier. If you want to keep more this year and give Uncle Sam less, there are things that can be done:
But sometimes, there are things you can’t plan for or truly difficult situations that happen to you that you can’t prevent. So you may need access to money from, say, a retirement account or life insurance policy to help ease the financial sting.
Typically, accessing those funds before coming of age comes with financial penalties. For example, prematurely pulling from your retirement account will cost you an extra 10 percent normally.
But that extra 10 percent penalty is negated if you’re making a withdrawal for specifically difficult situations, aka personal emergencies or domestic abuse situations. Naturally, there are some qualifying parameters around those, so make sure to do so under advisement (I can help with this).
There’s also another possibility to consider when you need money for things right now. Let me explain…
Why Columbia, SC Elderly Should Get a Senior Life Insurance Policy
“Old age, to the unlearned, is winter; to the learned, it is harvest time.” – Yiddish Proverb
One really obvious reason a lot of seniors don’t purchase a life insurance policy is the cost. Your risk of death increases as you age (sorry to be so blunt), so an insurance company is going to charge you a higher premium to cover that possibility.
The seeming need for life insurance also feels lessened because you likely have fewer dependents relying on that payout.
And with budgets being more rigid in the golden years, it’s not a monthly expense that many want to take on.
But, the protections that senior life insurance policy brings can actually make it a good investment – and not just because you get a payout later for the policy. Because you can use it to your benefit now. Here’s what I mean…
You can use senior life insurance while you’re still alive.
A life insurance policy could be a source of income for you and your spouse to take care of larger cost needs you’re facing right now (medical, debt, building an emergency reserve). This only applies to permanent life insurance, not term.
Because the policy has cash value, you can access it to get cash you need now to pay off debt or even make mortgage payments. And… the cash value on permanent senior life insurance grows tax-deferred.
Caveats: It will take time to build up so it won’t be immediately accessible. And anything you pull from the policy now detracts from the final payout figure later.
You can borrow against your senior life insurance policy cash value.
Withdrawals from your policy are usually tax-free up to the amount of premiums you’ve paid (known as your policy basis). However, any withdrawals exceeding this basis are subject to income tax. If that’s the case, you can also borrow against your cash value without triggering immediate income taxes on the gains.
This can help you manage your tax liability, even keeping you in a lower tax bracket during retirement and reducing taxes on Social Security benefits. And there are no repayment requirements during your lifetime. Once you pass, the death benefits could pay off the loan amount and the rest of the payout will go to your heirs tax-free.
Caveat: Loans accrue interest. If the loan and interest exceed your total cash value, you may need to contribute additional funds to prevent the policy from lapsing.
You can use senior life insurance for end-of-life costs.
Unfortunately, death can be expensive. There’s the coffin, the burial plot, the funeral service that follows, and that adds up. It’s not unusual to expect a 15-20K total for those expenses. But, a life insurance policy (even if it’s small) will cover that.
You can use senior life insurance to leave your family some money.
Since retirement savings and 401Ks aren’t typically going as far in our more inflated economy, taking out a senior life insurance policy could help supplement that gap. You could get a 150K policy for around 100 dollars a month. That’s a substantial chunk and may be worth it to enlarge what’s given to those you love after you pass.
Finding the right senior life insurance policy will take some work. A few guidelines to help you with your research:
– Don’t just get one quote. Shop around to find the right policy that meets your goals.
– Get at least three different quotes to give you a baseline for comparison.
– Consider amount, length, and type when researching.
– Make sure you establish the same baselines for each quote to get a viable comparison.
Though life insurance premiums are generally more expensive for you after 65, the options that securing one provides you can bring some peace of mind (for now or later).
And if you want to chat about the tax implications of that, I’m right here:
calendly.com/rejoicetax
Helping you save,
Akuathayre Snell