Tax-Free Retirement Plans

At Hudson Agency in El Segundo, California our tax-free retirement plans are easy to understand, and we make it even easier with the assistance of our knowledgeable and competent team.

What Is a Tax-Free Retirement Plan?

The payments that you put in go into a “cash-value” account and are identified by the IRS as insurance premiums under tax code 7702 so that they aren’t a taxable income even on gains from interest.

Participating Whole Life Insurance Policies vs. Indexed Universal Life Insurance Policies

The Participating Whole Life insurance policy has a guaranteed interest rate, plus any dividends paid by the carrier.

The IUL has a minimum (to prevent loss) and a maximum interest rate that can be earned relative to an index such as the S+P 500 or Barclay’s trailblazer sector 5 indices.

The cash value can be taken out as a “loan” against your policy and still earn interest from “Direct Loan Recognition,” which basically means that you earn interest on the money you withdraw and the money that you leave in your cash-value account. You are not obligated to pay the loan back since it is against your own cash value.

For these reasons illustrated above, most IULs will earn a lot more compounded interest and growth than any 401k, and avoid all the risk of being directly in the stock market.

For a consultation to see if you qualify for a tax-free retirement plan or if you’d like to learn the short-term and long-term advantages of starting a tax-free retirement plan, call us at Hudson Agency in El Segundo, California to set up an appointment with one of our tax-free retirement specialists!