Meet Mark, a 45-year-old veterinarian and owner of Healthy Tail Vet Clinic. Passionate about his work and future, Mark was in search of a retirement strategy that was straightforward, flexible, and accessible. That’s when he discovered the Life Insurance Retirement Plan (LIRP) through a consultation with an Amplify Advisor.
What is a LIRP?
A LIRP uses a cash-value life insurance policy, combining death benefit protection with an investment growth opportunity. It's particularly suitable for small business owners like Mark who need flexible financial tools.
How Mark’s LIRP Works
Mark opted for an Indexed Universal Life (IUL) insurance policy, which not only provides a safety net for his family but also builds a cash value that Mark can invest in various indexed accounts. Here’s why this plan stood out to him:
- Tax-Deferred Growth: The cash value in Mark’s LIRP grows tax-deferred, allowing investment gains to compound more effectively than in a taxable account.
- Retirement-Ready: Designed specifically for retirement, Mark’s policy is structured to offer tax-free income through policy loans and withdrawals during his retirement years.
- Early Access: Unlike traditional retirement accounts like IRAs or 401(k)s, the IUL policy provides Mark with access to funds anytime without taxes or penalties—perfect for unforeseen expenses or opportunities.
- Market Protection: The IUL policy minimizes risks with interest credits linked to market performance, ensuring that the cash value doesn’t decrease even if the market dips.
- Flexibility: Premiums are adjustable—Mark can increase, decrease, or pause his contributions depending on how his clinic is doing, keeping his financial plan responsive to his needs.
- Family Security: Beyond retirement savings, the LIRP ensures Mark’s family will be financially secure with a significant death benefit.
The Financials at a Glance:
- Annual Premiums to Age 65: $25,000
- Initial Death Benefit: $1,333,867
- Projected Cash Value at Age 65: $572,255
- Retirement Income (Ages 66-85): $60,408 annually
Takeaway
Mark’s journey with a LIRP has set him on a path to a secure, flexible retirement while also safeguarding his family’s future. For small business owners, a LIRP isn’t just a policy—it’s a strategic tool that provides growth, access, and protection. Like Mark, integrating a LIRP into your financial planning could enhance your retirement readiness and offer peace of mind knowing you’re prepared for whatever lies ahead.
Connect with one of our dedicated Amplify Agents today to discover how you can secure the future of your business, just like Mark.