Leave a Legacy, Not a Tax Bill
Who is going to inherit your tax burden? Do you know how your retirement accounts are taxed? Taxes are unfortunately a necessary part of life – and death. When you pass, any leftover tax burden you may have will be passed to your loved ones. This is just one of the many reasons why it’s so important to understand how you’re being taxed, and to prepare for your retirement future. The best way to handle unexpected issues is to prepare beforehand, and retirement is no exception.
When planning for retirement and allotting inheritance, many people plan to leave money in a taxable account for their heirs. However, this doesn’t usually pan out as people expect or hope. Instead of leaving a sum of money, what this actually does is leave a giant tax bill. If you want to leave the maximum amount for your loved ones – without the expensive strings attached – choose life insurance. Life insurance is the single most tax efficient way to leave money and pass on an estate. Rather than pass on a taxable account, consider spending that taxable account during your retirement, and leave the gift of life insurance instead.
When planning your future also means planning the futures of those you love, it’s important to make sure you’re making the best decisions for everyone involved. Just by staying informed and preparing ahead of time, you are already investing in your heir’s future!