The pros of a LIRP include possible tax benefits, liquidity, stability, and liability protection. With all these possible advantages, it is easy to see why Life Insurance Retirement Plans have become an important part of many investors’ portfolios. Depending on your circumstances, a LIRP can offer major advantages.
However, to make an informed decision, you need to know about all of these advantages to see how they might impact you. Anything that involves planning our estate requires careful consideration. Read on to learn about the unique advantages of adding a Life Insurance Retirement Plan to your portfolio.
If Structured Properly a LIRP is Tax-Free
A Life Insurance Retirement Plan has many similarities to a Roth IRA. Withdrawals from LIRPs are tax-free when you reach 59 ½ years old. Another significant advantage of these plans is that any of the gains are tax-deferred, which offers a sense of relief for many.
Ensuring that the LIRP is structured properly is key to taking advantage of the tax-free benefits. Because this is a situation where you don’t want to make any mistakes, getting professional assistance with this process is a good idea. You don’t want to miss any crucial benefits and end up paying unexpected taxes because of the wrong structure.
Pros of a LIRP Include Liquidity and Easy Cash Access
Increased liquidity and cash access is one of the pros of a LIRP. The more liquid an asset is, the easier it is to get cash from it when needed. As anyone who has ever faced a major financial crisis knows, there are fewer things more frustrating than having to wait to take your money out.
Easy access to cash makes planning for retirement easier. As we age, we are likely to face a lot of unexpected expenses, from medical to home-related. The faster you can access the money you may need, the smoother and more enjoyable your retirement will be.
LIRPs Are Unaffected by Stock Market Volatility
Another reason many prefer LIRPs is that they are not as subject to stock market volatility as some other types of assets. As non-correlated asses, LIRPs will stay stable, even in times of major economic uncertainty, like recessions. You don’t have to spend your time worrying about waking up to find that your hard-earned investments are gone because of an unfavorable stock market situation.
Even if you are not risk-averse, many would recommend making sure your riskier investments are balanced with more conservative options. When you have a diverse portfolio, you can have the best of good returns, coupled with a reduced risk of major losses. This combination will help give you a more worthwhile portfolio.
Pros of a LIRP: A LIRP Offers a Death Benefit
Another advantage of a LIRP is that it offers a death benefit for survivors. Although many investors think primarily about the cash they can take out before death, the death benefit eases much of the burden on those left behind. The beneficiaries have the resources required to meet many of the expenses left behind in the event of your death, making a winning situation all around.
If you have a business with lots of expenses, a death benefit can be beneficial for whoever inherits your business. This benefit can provide a buffer against whoever takes over your business having to borrow a lot of money. LIRPs are among some of the most versatile investment options available.
Prevail offers innovative investment strategies using a team approach to help you maximize their overall value. If you have any questions about the pros of a LIRP or any other popular investment tools, contact us today.
Prevail Contact Information:
Email: riseabove@prevailiws.com
Phone: 913-295-9500
