June 25, 2024

Should I Do a Roth or a Life Insurance Retirement Plan?

If we are looking at pulling money out of the IRA’s where do we want to put it? Typically we have 2 main options, we look at doing Roth Conversions or we might do Cash Value Life Insurance, depending on what your goals are. Another option is a plain Investment account. Roth, if you want income right away. IUL would be income, more of the death benefit, long-term care benefit plus it could be Estate Tax-free. Brokerage Accounts or Investment accounts are very liquid and also can be in the Trust. What’s important is we figure out what your goals are then we pick the right tool and strategy. A lot of times it’s a combination of both.

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Episode Transcript

LIRP

Should I do a ROTH or a LIRP, given my taxes might go up?

Welcome to Berry’s Bites. Please join our host, Attorney and Financial Advisor, Chris Berry.

So LIRP, this is a acronym created by a friend and colleague of mine. Stands for Life Insurance Retirement Plan. Really all this is, is IUL, it’s Cash Value Life Insurance. And again, we talked about if you’re looking at pulling money out of the IRAs, where do we want to put it? Typically we have kind of two main options. We look at doing ROTH conversions, or we might do Cash Value Life Insurance. So as we pull money out of the IRAs, if we’re looking at something tax-free, we might go ROTH, we might go IUL. Also, we might just go plain Investment Account, as well. And it really just depends on what your goals are.

ROTH

I would say ROTH, typically, if you want income right away or sooner. IUL would be income, more of a death benefit. Also this could be long-term care benefits as well. Plus it could be a state tax-free. Brokerage account or investment accounts, advantage here it’s very liquid, can be in the trust, just like IUL can be in the trust. So again, let’s figure out what your goals are and then pick the strategy and tools. But a lot of times it’s some combination of both. So I have some clients that, let’s say we’re moving $100,000 out a year. 50,000 goes to ROTH, 50,000 to IUL. It really just depends on what your plans are.