Retirement. It’s finally time to celebrate your many years of around-the-clock work. It’s also the time that you start to wonder if that retirement nest egg calculator was correct.  If you’re wondering whether or not your retirement funds will always be there, you’re not alone.  Nearly three out of five middle-class retirees will outlive their financial assets if they continue their current standard of living. 

That means you have a very good chance of coming up short. It’s possible that you will need new retirement funding solutions. So let’s not sit and cross our fingers, right?

You may consider retiring to an area with a low cost of living such as Virginia or North Dakota. However, with a fixed income, you’ll still need to get all that you can from your assets to fund your retirement goals. Even if it seems funds will be there, it’s always best to prepare for the inevitable bumps in the road.   

Have you considered selling your life insurance policy? Many retirees aren’t aware of this option. As a result, they let their policy lapse without ever getting a return on that investment.  In fact, 88% of all universal life insurance policies are lapsed or surrendered – without payment of a death benefit. That is a wild statistic when you think about it.

The majority of retirees are not taking advantage of the life insurance policy in their pocket. The one they have been carrying around and paying into for a large part of their life. This is one of the best retirement funding solutions that many people don’t really know about. Yet, life insurance policies are something so many people have. 

With life settlements, the insured person sells their policy to a third party for an upfront cash settlement. The buyer takes over the premiums and collects the death benefit when the insured person dies. 

Life Settlements Remain One of the Best Retirement Funding Solutions

When you sell your life insurance policy for a single cash payment, you are free to do whatever you want with the money. Instead of having your policy tied up for beneficiaries that may not need it anymore, you have access to the cash to help fund your retirement. 

You’ve been carrying around this policy for a while… might be time to cash in. Even after paying taxes, selling a policy for cash will almost always result in a higher payout than surrendering the policy.

Changes to the Life Settlement Tax Law

Before 2017, life settlements included a tax that took a large portion of the cash value of a settlement. In 2017, The Tax Cuts and Job Act changed that.

You no longer need to factor in the cost of insurance charges when doing taxes. The amount of money lost to taxes has drastically decreased with this new law. 

A life settlement isn’t completely tax-free but it is almost always more profitable than surrendering the policy. 

Quick Cash in Hard Times

Many policyholders will allow a policy to lapse during financial hardships in an effort to reduce their monthly bills.  Most don’t know they could potentially sell that policy which would eliminate that monthly bill and provide access to a lump sum of cash.

Many people fund their retirement with money from stocks and 401k’s.  However a market downturn or recession is generally not something you can predict. The good thing about life insurance settlements is that the money you get from them usually doesn’t correlate with the stock market or the economy. When other assets in your portfolio may be lowering in value, your life insurance policy is not affected.

People may learn of options to get money from their policy when they call their insurance company. However, they likely don’t realize selling their life insurance policy to a third party can give you much more. A life settlement payment is higher than the cash surrender value that you can get from your insurance company. 

Help to Pay Medical Bills

As your health declines your life insurance policy actually becomes even more valuable. During this time many are looking for extra cash to help pay these bills. You may find you need accommodations with declining health. Selling your life insurance policy can give you the funds to provide those accommodations in your life. 

Pay off Your Mortgage   

Instead of paying for the policy every month, you can drop that bill and your mortgage payments. With life settlements, you are given a large lump sum of money. This may be just what you need to pay off your mortgage. Depending on how much you’re paying in interest this may be the smartest option. Many policyholders will eliminate their monthly premiums and also their monthly mortgage payment. 

Invest Your Policy Return to Generate Regular Income

There’s an old saying about working smarter rather than working harder. Putting your money in smart places is the best way to fund your retirement. 

Your money isn’t working for you in your life insurance policy, so you move it somewhere it can work for you. Life settlement solutions give you the opportunity to invest your money smarter. Consider these investment options when you sell your life insurance policy: 

• stocks
• real estate/rental property
• annuities 

If you can get your money to provide regular income then it will last you much longer. 

It also doesn’t take the money completely off the table for your loved ones when they may need financial help after you are gone. 

Liquify Your Assets

Pull from all your assets to create a comfortable life in retirement. You may not need your life insurance policy, but you do need cash to afford retirement. 

Don’t overlook the value of your life insurance policy and the new opportunities it could bring you and your loved ones. Ted Muller completely changed his retired life with his life settlement. 

Retirement funding solutions can be tricky to produce. So, unless you plan to move to a place like Mexico with an extremely low cost of living (sounds nice!), you may want to consider a life settlement option to help you fund your retirement goals.