Posted on December 20th, 2022.

The Setting Every Community Up for Retirement Enhancement (or Secure) Act has made IRAs a less convenient vehicle for estate planning, sending advisors looking for other tax-friendly ways to pass wealth to heirs.

Life insurance is one such option, and Secure Act-proofing an estate plan isn’t the only benefit it can provide a retired client.

Three retirement planning and insurance experts discussed life-insurance-based strategies that financial advisors may want to consider during a webcast hosted on June 15 by ThinkAdvisor.

Overall, for individuals with their savings tied up in “tax inefficient types of assets,” it’s worthwhile to “consider this type of a structure,” said Michael Finke, professor and Frank M. Engle Chair of Economic Security at the American College of Financial Services. “You can end up passing on far more money, net taxation, using life insurance than you can in an investment portfolio in a nonqualified account.”

The other speakers who outlined the role life insurance can play in retirement planning during the webcast were David Blanchett, head of Retirement Research, PGIM DC Solutions, and Dennis Martin, president, Individual Life & Financial Services, OneAmerica. 

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