Retirement planning is a mess in this country
I’m an Ed Slott Elite IRA Advisor (correction 2016 – I WAS, it became so cost prohibitive I use another service now). It’s a prestigious group of about 400 members across the country who take the time and training to be the absolute best with IRA planning.
I’ve been a planner for nearly 20 years. When I joined the group I thought “I probably won’t learn anything new”. Boy was I wrong!
Life insurance proceeds deposited into a Roth IRA???
Just last week I was referred clients who received their sons life insurance policy in the amount of $400,000. He died overseas, fighting for our country. God bless him and his family for their sacrifice.
The insurance proceeds are known as SGLI (Servicemembers Group Life Insurance). There’s a few paragraphs in IRS publication 590 that allow recipients of such proceeds to contribute the ENTIRE amount into a ROTH IRA within 12 months of receiving the check.
The clients had no idea they could do this. Suffice to say, it added over $300,000 in lifetime benefits to them when I did their retirement plan. That 300K came from tax savings because the ROTH is protected from taxes.
The best part is the Roth IRA will pass to their heirs tax free as well! This is one of those tax code nuances that 99% of people will never know or need to know.
Fortunately, we had access to the right information to help them through this tough time. I owe thanks to the Ed Slott IRA crew as well! They were helpful in the process.
The Ed Slott group also puts out great educational pieces. The one I cam across today really stands out…
Retirement crisis infographic
Attached above is an interesting infographic on the sad state of retirement planning in this country. Were you aware that 14% of baby boomers have no retirement savings?
While it’s never too late to start saving, it’s critical you start now! The more you save and invest wisely, and the earlier you do it, the better off you’ll retire later!