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Live Off Your Investments and Also Leave Them to Your Estate

04
Jan

Live Off Your Investments and Also Leave Them to Your Estate

There is a way to use your savings to fund your retirement, while also leaving that money to your heirs. It’s a smart tactic; like having your cake and eating it too. By pairing an annuity with life insurance, you will receive steady income to retire on, while the capital you used to purchase the annuity returns back to your estate when you die.

This plan is great for a retiree with limited resources who needs a specific monthly income. It’s also a clever way for a wealthy person with ample savings to support a spouse or child.

Annuity products have been around since the 1980s. You invest your money into an annuity and from it you receive a guaranteed income, one that won’t fluctuate with market conditions. They make it possible for you to simply enjoy life without worrying about managing your money.

Annuities also offer tax efficiency, which is another good benefit. Your capital goes into buying the annuity, giving you money back every month, but you only pay tax on any growth that comes from your original pool of money.

You can put the tax money you are saving towards the life insurance policy which secures the value of your original capital. It’s like doubling down on your money. The policy becomes a cash payout to your estate, equal to the value of the annuity you have been living on during your golden years.

Different annuities have different features. The one offering the highest potential income is the most desirable, but the payments will terminate upon your death. No matter how soon that might be; it’s the risk you take with this type of annuity. But when you pair it with a life insurance policy, the value of your original capital will never be lost. With this strategy, you will leave more than enough money for your heirs without sacrificing your need for income today.

You must plan this strategy carefully, ensuring you have the insurance lined up at the time you buy the annuity. Because in exchange for your new guaranteed income, your money is permanently locked in.

An insured annuity will give you a more carefree retirement. You can live off your investments and also leave them to your heirs. It takes careful planning to make it work to your advantage, so ask your Financial Advisor for help.

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