Visit Us

Will Taxes Effect Your Retirement?

A retirement saving plan and a retirement income plan are two different things, and not everyone is knowledgeable about the difference. A recent study by Nationwide shows that a large majority of participants could not identify the difference between the two, highlighting the need for these differences to be addressed. While a retirement saving plan is probably the most familiar to people, it’s the retirement income plan that can build on those savings blocks. However, those income resources can come with unforeseen surprises if proper education is not provided. One of those surprises may just end up being taxes.

Many are not knowledgeable about how taxes impact their retirement income. In the Nationwide study, most participants across many age groups did not feel confident about tax planning. There is a clear lack of confident about how income sources will be taxes in the future. This included Medicare, RMD’s, pension withdrawals, IRA’s, and 401(k)s. These popular resources are utilized by many retirees and those looking to retire in the next 10 (or more) years. A financial professional can become a valuable resource to clients in this specific area, by providing the proper education about what to expect from these taxable resources, as well as offering their clients potential supplemental options.

Here at Simplicity Life, we provide our advisors with tools of their own to enable you in this exact endeavor. With these tools you won’t have to ask your clients to change habits. Contributing to a regular 401(k) can be a part of a valuable retirement strategy. Using one of our tools like the 401(k) Tax Neutralizer will help you educate your client on the tax liabilities of distributions from regular 401(k) plans and demonstrate how a properly structured IUL policy can pay for those future tax liabilities by utilizing free tax loans.

An IUL can be viewed as a type of tax-protected financial product whose structure may have less limitations and more flexibility than a 401(k). The IUL allows policy holders to build a tax-deferred cash value, often with a guaranteed minimum interest rate. Policy structures vary and, depending on the structure, clients may be able to take out a one-time payment or a stream of payments over multiple years.  By reviewing the future, potential tax liabilities with regular 401(k) plans, and how to offset that with the potential of the IUL structure, you have the ability to become a valuable resource for your clients and providing them with information this Nationwide study shows they may not possess.

For more information on the 401(k) Tax Neutralizer, IULs, and other tools Simplicity Life provides to help you better equip your clients contact Simplicity Life today! 800.921.3100



The Challenge of Retirement Income and Tax Planning, Nationwide


*This blog is not intended to provide specific legal or tax advice and cannot be used to avoid penalties or to promote, market, or recommend any tax plan or arrangement. You are encouraged to consult your personal tax advisor or attorney.






The information contained herein is for general information purposes only. Simplicity Life is not to be held responsible for the accuracy of this information. Neither Simplicity Life nor its employees provide tax or legal advice. As with all matters of a tax or legal nature, your clients should consult their own tax or legal counsel for advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax adviser.

The information, statistics, and opinions reported herein are from sources believed to be reliable. However, Simplicity Life and the author of this blog do not guarantee the truth, accuracy, and reliability of any source, fact and/or statistic cited and no do necessarily agree with any opinions expressed by such sources.

Get MORE Insurance News Now!

Stay up to speed with trending industry updates. Submit your email address below to join our mailing list NOW!

Your Email (required)