A. Typically when people plan for retirement, the questions to answer are:
- Will I have enough money to retire?
- How much will I have to spend for health care?
- Can I leave a legacy to my children, grandchildren, or a charity?
A Bridge Between Retirement Age and 70
For most people, if you can afford to wait to take Social Security benefits, you should defer taking them until age 70. By deferring to age 70, the monthly benefits will increase by 76% than taking at age 62. By deferring, your spouse will also get a proportionately higher survivor benefits.
So it's logical to defter, and this is where a cash value life insurance could help build a bridge to help defer taking Social Security.
If You Are in Mid-forties ...
Assume you are a male in mid-forties and purchases a participating whole life policy designed to produce a fast-growing death benefit. If you select the dividend option of paid-up additions, the benefits to you are that you have immediately created a legacy for your loved ones and are building cash value.
If you pay the premium on your policy until age 65, and then decide to retire, you could reduce pay-up the policy and change your dividend option to cash. This would increase your cash value by the amount of the premium. You also could take an income from the policy in the form of withdrawals at age 65 to 69, and then, at age 70, you could stop the withdrawals and start taking your social security benefits.
In the above example, the cash value life insurance acts as a bridge to defter taking Social Security until age 70 so you could receive the maximum Social Security benefits for you and your spouse. these withdrawals also could be used to help offset medical care costs, and the policy's face amount could still provide a legacy.
If You Are in Twenties or Thirties ...
In fact, it's never too early to plan for retirement. If you are in your twenties or thirties, you could buy a participating life insurance policy designed to provide early, fast-growing guaranteed cash value, in addition to the peace of mind the guaranteed death benefit will provide you and your loved ones, throughout your life you can enjoy access to the cash value in your policy through policy loans.