A retirement insurance plan means different things to different people due to its flexibility in how it is used.
Retirement insurance is an insurance plan that has a primary goal of providing different avenues of protection based on your retirement needs. You have some flexibility in how you use the insurance – and some of the uses have restrictions.
Anyone with dependents, assets, or concern about taxable income in retirement, can benefit from a retirement insurance plan. If you have people depending on your for support, whether it is prior or following your death, such policies provide peace of mind knowing they will be taken care of. Even without any dependents, the fact remains, people are living longer than ever before. The average life expectancy in the US is 78 years and you will need enough income to support yourself during the golden years. A retirement insurance plan can provide some tax-free income.
Common reasons for obtaining a policy include:
Avoiding an increased income tax in your future
Finance your long-term care needs
Paying for college, without removing the ability to obtain financial aid
Paying your debts off when you die
A tax-free income upon retirement
Control over what happens after you have passed away
This insurance is earmarked specifically for retirement years and is tucked away until that time, though some programs allow early withdrawal for specific uses. How you use your particular plan will depend on your individual needs.
Types of retirement plans include:
529 College Savings Plan
Individual Retirement Accounts (IRAs)
The major benefit of these programs is that your income is protected and tucked away for use as needed in your later years. In addition, the income you are investing into your retirement plan is tax-free, unless you choose early withdrawal against them.