Show Notes

High income professionals face a unique situation when it comes to their retirement. You have the dual challenge of having your money tied up in your investments and also looming tax burdens once you retire.

Listen to the latest episode of the podcast to learn about a Specially Designed Life Insurance policy, also known as a life insurance retirement plan, and how it could be the wealth preservation tool you’ve been looking for.

  • A high cash value life insurance policy can help facilitate tax-advantaged growth that standard retirement accounts may not be able to match.
  • Many professionals spend a considerable amount of effort accumulating wealth for most of their life only to find themselves in a bind: their money is inaccessible with looming tax burdens.
  • High Income professionals often face a dual tax burden where their current high income places them in a high tax bracket, reducing the net income they have available for investment. Meanwhile, the money you’ve diligently saved in your retirement plan will be subjected to potentially hefty taxes upon withdrawal later in life.
  • Retirement accounts are great vehicles for long-term savings, but they lack flexibility, and you’re penalized for early withdrawals leaving you without a readily available source of funds for unexpected opportunities or emergencies.
  • For high income individuals grappling with these issues, a Specially Designed Life Insurance policy may be the answer.
  • A Specially Designed Life Insurance (SDLI) policy utilizes a high cash value life insurance policy to facilitate tax-advantaged growth and offer flexibility that standard retirement accounts simply can’t match.
  • Cash value builds over time in the policy, growing in a tax-deferred basis mirroring the benefits of a retirement account, yet the cash value can be accessed at any time through a non-recognition policy loan.
  • If properly managed, these policy loans have flexibility and are not required to be repaid during your lifetime and can be simply deducted from the death benefit or cash surrender value when the policy pays out.
  • The SDLI strategy enables you to tap into your wealth when needed, providing the liquidity to seize investment opportunities or meet unexpected expenses.
  • The policy loans do have an interest charged on them, but well-designed policies provide an opportunity to offset the interest.
  • Not all life insurance policies offer the features necessary to execute the strategy effectively. It’s a delicate balance that must be carefully managed and is best done with the help of a professional.
  • This strategic tool offers several other key advantages for wealth management, asset protection and estate planning.
    • In many jurisdictions, life insurance policies are protected from creditors providing a shield for your assets.
    • Life insurance can also play a crucial role in balancing out an estate amongst surviving family members.
    • A life insurance policy can also provide immediate liquidity to family members or business partners upon a death, ensuring the continuity of a business or farm without the need to sell off assets.
    • Life insurance proceeds can also provide a tax free inheritance to your beneficiaries, helping to preserve your legacy.
  • A common pushback against using life insurance as an accumulation vehicle is the perception that it is expensive and takes a long time to accumulate substantial cash values. This is because most common policies are focused on maximizing a death benefit instead of rapid cash value accumulation.
  • While there is an undeniable cost associated with a special desire life insurance policy, it’s crucial to consider this expense in contrast to the potential tax liabilities.
  • Retirement account distributions are generally taxed as ordinary income. For a high income individual, this can be losing a substantial chunk of your retirement savings to taxes.
  • In many cases, the cost of a Specially Designed Life Insurance policy could be a mere fraction of what the tax liabilities may be on an investment growth over time.
  • The true cost of these policies become apparent only when considering the full financial picture, including current and future tax burdens, access to cash and long-term wealth accumulation.
  • A Specially Designed Life Insurance policy is not a catch-all solution but rather a tool within the context of a comprehensive wealth management plan.

Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA & SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS.

Any descriptions involving life insurance policies and its use as an alternative form of financing or risk management techniques are provided for illustration purposes only, will not apply in all situations, may not be fully indicative of any present or future investments, and may be changed at the discretion of the insurance carrier, General Partner and/or Manager and are not intended to reflect guarantees on securities performance.

The term BUILD Banking™️, private banking alternatives or specially designed life insurance contracts (SDLIC) are not meant to insinuate that the issuer is creating a real bank for its clients or communicating that life insurance companies are the same as traditional banking institutions. This material is educational in nature and should not be deemed as a solicitation of any specific product or service. BUILD Banking™️ is offered by Skrobonja Insurance Services, LLC only and is not offered by Madison Avenue Securities, LLC. nor Skrobonja Wealth Management, LLC.

Any references to protection, safety or guarantees, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier.

Skrobonja Insurance Services, LLC does not provide tax or legal advice. The opinions and views expressed here are for informational purposes only. Please consult with your tax and/or legal advisor for such guidance.