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Retirement Income: Using IRAs, 401ks and Tax Advantaged Life Insurance

No matter how you envision spending your golden years, you’ll need retirement income to turn those dreams into a reality.

This calculator snaps many of us out of our “retirement dream” and back into the reality of just how much income we’ll need in those years.

The bear market has shown us that even the most frugal savers may not be prepared for retirement.

If you’re saving into qualified plans like IRAs and 401ks - GREAT! These typical investment plans are fantastic savings vehicles.

The cold, hard truth is: you need more than that. Why?

Because the tax burden upon withdrawal will be quite large! So many of us don’t calculate for the significant amount of taxes we’ll be paying on our nest eggs as we withdraw retirement income.

So, how do you set yourself up for a comfortable retirement? Include tax-free assets.

If you are not yet saving into a tax-advantaged life insurance plan, sometimes referred to as a buffer assets, now is the time to learn more and diversify your portfolio.

Making the right choice can help you maximize your savings, and could result in many extra thousands—if not millions—of dollars down the road.

Let’s review some important facts about retirement income:

What are 401(k)s, IRAs and ROTH IRAs?

A 401(k) is a retirement savings plan offered by many employers to encourage retirement savings. You can choose how much you want to invest pre-tax, and your employer may match some of this. These qualified savings plans enable you to pay into them before the government taxes you. This means you can save more up front.

An IRA (Individual Retirement Account) is a retirement savings account that you can open yourself that allows you to contribute pre-tax dollars, allowing your money to grow tax-deferred.

The downside of both the 401k and the IRA is that the taxes will be due when you’re ready to use the money.

A ROTH IRA is another personal account that you fund for retirement - but not with pre-tax dollars. Rather, you fund this after you’ve paid taxes so that you can withdraw the funds in retirement tax-free. NOTE: The government specifically limits the amount you can invest yearly into a ROTH IRA so they do not lose out on too much tax income.

You can have both a 401k, an IRA and a ROTH IRA - and I personally recommend having all of these in your portfolio. I also believe you need something else, too:

Why Tax Advantaged Life Insurance Is A Valuable Addition

As the name suggests, Tax Advantaged Life Insurance is an asset that can be utilized as an investment vehicle for 100% tax-free retirement income.

Interesting, right? It’s quite simple actually:

Overfunding the cash value of your life insurance policy earns you tax-free interest = income you can use in retirement.

Unlike 401ks and IRAs that require you to pay taxes when you use the funds, your life insurance is completely tax free.

Tax Advantaged Life Insurance offers:

  • Typical historical returns of 8.5% - 15%

  • 0% taxes on growth

  • 0% taxes on retirement income

  • Family pays 0% on your legacy

On top of this, this works as one of the best inflation investment strategies to keep your portfolio safe and ride out a bear market.

For those not yet nearing retirement, Premium Financed Life Insurance is a worthy investment strategy to consider. This is when we add leverage to your policy, infusing it with a lump sum of cash from a lender to compliment your overfunding contributions.

If you have 10+ years before retirement, this strategy offers a low-risk option to grow your tax-free interest at a much higher and faster rate. At EFS, we specialize in Premium Financing and I am happy to answer any questions you have on this niche.


Funding your qualified retirement plans is important, but you need a diverse portfolio with tax-free options to really maximize your retirement income.

If you have any questions, contact us or reach out to me directly at or call 773-318-9608.



901 N Lake Destiny Drive, STE 380

Maitland, FL 32751


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