Accessing Your Retirement Assets with Minimal TaxationSubmitted by Parkhouse Financial Inc. / Gravitas Securities Inc. on May 12th, 2016
Protecting the financial well being of your family can also help you achieve the retirement lifestyle you deserve
We generally think of RRSPs and Pensions when we think about retirement. Many of us will rely on these types of plans along with government sponsored pensions, such as the Canada Pension Plan and Old Age Security, as our main sources of retirement income.
The Problem: Taxation
The biggest retirement income challenge with RRSPs, Pensions, Government Pensions and LIRAs (pensions transferred from a former employer) is that all of the income withdrawn from these types of registered plans has yet to be taxed. As such, income received in a retiree’s hands is fully taxable.
Additionally, the amount you can contribute to these plans is limited.
This means the base amount may not be large enough to provide the retirement income you desire.
The Solution: Minimize Taxes
One solution is the Insured Retirement Program. It uses a permanent life insurance policy to provide you with the insurance protection you need to transfer wealth to your family tax free PLUS a unique additional feature --- access to tax-free cash during your retirement years.
How it Works
Under current tax law, the cash value in a permanent life insurance policy accumulates tax-free, up to certain limits. The Insured Retirement Program lets you use that cash value at a point in the future. Whether you want to supplement retirement income, purchase a vacation property or go on a trip, the Insured Retirement Program lets you use your policy’s cash value as collateral for a bank loan.
The bank loan provides the cash you desire --- and you receive it tax-free. The loan doesn’t have to be repaid until the life insured dies. When the insured person dies, the tax-free death benefit is used to repay the loan. Once the loan is repaid, any remaining death benefit is then paid to your beneficiaries.
Are You a Candidate?
Estate and retirement planning is critical to your financial health and it requires careful consideration. The Insured Retirement Program is designed for you if you:
- Want to supplement your retirement income with tax-free dollars
- Want to reduce the amount of tax you’re currently paying on investments
- Are in a high marginal tax bracket
- Need permanent life insurance protection to pass tax-free wealth to your heirs
Let’s Discuss Your Retirement Plans
Contact me directly at 416.838.3617 or nparkhouse@GravitasSecurities.com so we can determine how best to incorporate the Insured Retirement Program into your retirement plans.