Don’t put all of your retirement dollars in one basket

Don’t put all of your retirement dollars in one basket

Diversification is one of the most popular planning techniques in the financial services industry. The old adage of “Don’t put all your eggs in one basket” should come to mind when talking to prospective clients about retirement plans.

Life insurance is a great addition to a portfolio to provide growth, protection and liquidity. Life insurance is the asset clients’ need to own in order to enjoy a tax efficient retirement. American adults consistently rank having enough money for a comfortable retirement a high priority according to LIMRA research.

Diversifying the income tax treatment of investments can reduce income taxes in retirement and increase cash flow for your clients.

For example, let’s assume Mary and John Smith withdrew 120K from their 401(k) – assuming a 35% tax rate, they would be left with $78,000. If instead, they took $40,000 from each of their three alternatives – $40,000 from their 401(k), $40,000 from a mutual fund, and $40,000 from an insurance policy, they could potentially receive net income of $100,000!


Diversifying taxes is an important part of retirement planning and life insurance is an integral part of the modern day retirement portfolio. Life insurance provides income in a tax favored way (without the same limitations that are placed on retirement plans), long-term care benefits (to protect existing assets), and protects heirs by providing tax free death benefits if an untimely death were to occur.

Have you figured out all the ways life insurance can help people retire comfortably? 

Share this post