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Stas Politis, CPFA®
Stas Politis, CPFA®
Upward Wealth Group, LLC Employer-Sponsored Plan Advisor & Investment Representative
https://www.upwardwealthgroup.com (561) 345-3992

At Upward Wealth Group, we understand the critical role of employer-sponsored plans in talent retention and employee financial well-being. By reducing financial stress, these plans foster a healthier work environment and enhance productivity and performance. With our tailored approach, we ensure that your company's retirement plan is not just effective but also aligned with your organizational goals.

Our services cater to a diverse clientele, including self-employed professionals, entrepreneurs, business owners, and executives/trustees seeking to optimize their retirement savings. With decades of experience and a commitment to personalized solutions, we specialize in crafting employer-sponsored retirement plans that suit your specific requirements. Whether you prefer a straightforward, easy-to-administer plan or a more intricate one tailored to your unique circumstances, we've got you covered.

Given their substantial contribution to our retirement nest eggs, we recognize the significance of 401(k) plans in retirement planning. It's essential to synchronize all your savings and investments inside and outside employer-sponsored retirement plans to maximize their combined potential in achieving your retirement objectives. By harmonizing these elements, we can build a comprehensive portfolio that works synergistically toward securing your financial future.

Let's collaborate to design a retirement plan that meets regulatory requirements, empowers your employees, and positions your business for long-term success. Reach out to us today to embark on this journey toward financial security and prosperity.

When Life Insurance Becomes Taxable

Insurance Read Time: 3 min

In 1900, the average life expectancy of a newborn was only 32 years old. By 2021, that number more than doubled to 71 years, and the trend is expected to continue.1

Living this long may have unexpected tax consequences. Here’s why.

Many older life insurance policies mature at a specific age, typically 95 or 100. If the insured individual attains that age, the policy’s cash value may be paid out to the policy owner in lieu of a death benefit payment.2

Tracking Taxes

This payout may be taxed as ordinary income on the amount that exceeds the policy owner’s cost basis (or the sum of after-tax premiums). The after-tax amount would then become part of the policy owner’s estate and may be subject to further taxation upon the policy owner’s death.3,4

If a policy is owned by an irrevocable trust, the trust is responsible for any tax owed, though the proceeds would not become part of the insured’s estate if the insured had no incidents of ownership.3,5

Managing the Taxable Risk

This taxable risk may be mitigated through a maturity extension rider, which allows the policy to continue until the death of the insured. Many newer life policies come with a higher maturity age (like 120) or an indefinite period.6

1. OurWorldinData.org, 2023
2. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder may also pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
3. Investopedia.com, April 29, 2023
4. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
5. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.
6. Forbes.com, May 12, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

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