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Save for Retirement to Help Ensure Stability Later

Retirement Planning
Elderly retired couple enjoying a good book on the porch

The need to save more money for retirement may seem obvious — particularly to those approaching retirement age — but successful retirement planning should start much earlier than that. Fortunately, there are a variety of options available.

Retirement Plans

The majority of saving for retirement occurs through qualified or non-qualified retirement accounts. According to the most recent Employee Benefit Research Institute (EBRI) Retirement Survey, at least four in five say they anticipate receiving retirement income from a workplace retirement savings plan, an individual retirement account, and personal retirement savings and investments.

Outside of work, traditional savings accounts — including CDs, mutual funds, stocks, bonds, and real estate — can also be used to save for retirement. There is no tax deduction when contributions are made, and no contribution limits.

Life Insurance

Finally, life insurance can provide an opportunity to supplement retirement income from retirement plans and general savings. Life insurance can be useful to not only save for retirement — with the right structure, a life insurance policy can even grow retirement income on a tax-deferred basis.

Permanent life insurance — like universal life or indexed universal life — is designed to build money inside the policy (called "cash value.")

  • Universal life insurance pays a set interest rate on any cash value that's built up within the policy. With universal life, there's generally flexibility1 when it comes to premium payments, death benefits and the policy's value. Your policy (if sufficient) can then be used for a variety of reasons — including retirement funds.2
  • Indexed universal life insurance offers all the benefits of universal life, plus the potential for additional growth. Any premium paid above the IUL policy's fees, charges and expenses (known as the "net premium") builds up as cash value, and can grow through credited interest.

Different kinds of permanent life insurance build value in different ways, but the goal is always the same: to make money within the policy, and to use at least part of that money to fund retirement expenses. With clear benefits and a wide array of products and structures, chances are that life insurance can help you save for retirement.


1 There must be enough cash value in the policy to cover monthly charges if a lower premium is paid than the amount selected at issue or if a premium payment is skipped. Additional premium payments may need to be made to keep the policy in force. 
2 Loans, which will accrue interest, and withdrawals can generate an income tax liability, reduce the Account Value and the Death Benefit, or may cause the policy to lapse. Sufficient premium and account value is necessary to cover insurance costs. Index returns do not guarantee that the policy will stay in force.

The information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) addressed by this material. This material is being provided for informational purposes only. Columbus Life does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. Consult an attorney or tax advisor regarding your specific legal or tax situation. There are insurance related costs to a life insurance policy. Premiums paid must produce sufficient cash value to pay insurance charges.