• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • WHO WE ARE
    • About Our Firm
    • Attorney and Staff Profiles
    • News and Events
  • Areas We Serve
    • Essex County, MA
      • Andover
      • North Andover
    • Hillsborough County, NH
      • Manchester
      • Nashua
    • Middlesex County, MA
      • Concord
      • Lexington
      • Wakefield
      • Winchester
      • Woburn
    • Rockingham County, NH
      • Exeter
      • Londonderry
      • Salem
  • Services
    • Asset & Business Planning
    • Elder Law & Medicaid Services
    • Estate And Gift Tax Figures
    • Family-Owned Businesses & Farms
    • Legacy Planning Services
    • LGBTQ Estate Planning
    • Loss Of A Loved One
    • Pet Planning
    • Power Of Attorney
    • Probate and Trust Administration
    • SECURE Act
    • Special Needs Planning
    • Young Families
  • Elder Law
    • Coping with Alzheimer’s
    • Hospice Care
    • Medicaid Planning
    • Nursing Home Planning
  • Resources
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder law reports
      • Elder Law Resources
        • Elder Law Resources – Londonderry, New Hampshire
        • Elder Law Resources North Andover, Massachusetts
        • Nashua, New Hampshire Elder Law Resources
        • Woburn, MA Elder Law Resources
    • Estate Planning
      • Estate Planning Articles
      • Estate and Gift Tax Figures
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Free Seminars
    • Frequently Asked Questions
      • Asset Protection Planning
      • Business Planning
      • Charitable Gifting
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Incapacity Planning
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Trust Administration & Probate
      • Wills and Trusts
    • Newsletters
    • Pre Consultation Form
    • Presentations
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss Of A Loved One
      • Probate Resources
        • Nashua, New Hampshire Probate Resources
        • Probate Resources – Londonderry, New Hampshire
        • Probate Resources – North Andover, MA
        • Probate Resources – Wakefield, Massachusetts
        • Woburn, MA Probate Resources
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Published Books
  • Live Seminars
    • Online Seminars
    • In-Person Seminars
  • Videos
  • Contact Us
  • Blog
  • Reviews
    • Our Reviews
    • Review Us

DeBruyckere Law Offices, PC

Serving Southern New Hampshire & Essex Country, Massachussetts

Call us today(603) 894-4141

(978) 969-0331

Online Seminars
Attend Free Seminar
Home » IRA & Retirement Planning » Is Using Your 401(k) to Buy Insurance Wise?

Is Using Your 401(k) to Buy Insurance Wise?

July 21, 2015IRA & Retirement Planning

While you can use your 401(k) to purchase insurance, whether or not it’s wise depends on your unique situation. Recently, the IRS released new rules allowing for the purchase of annuities with tax deferred retirement plan funds. For many, the attraction of using their 401(k) to pay for life insurance comes from the partially tax-deductible premiums.

The Employee Retirement Income Security Act places some limits on the amount of life insurance you can buy; however, those limits fall away after a few years.

So, why would this now be an option, many wonder? The answer is simply because we’re living longer. Unfortunately, we didn’t necessarily plan for these longer lives or maybe we did and just underestimated what we might need. These policies are purchased at a small price and they’re left until you reach a certain age.

For many of us, as we approach retirement and knowing life expectancies are on the rise, these options are ideal for many Americans in their long term planning efforts while also ensuring they have a regular stream of income for as long as they live. Designed to deal with the shortcomings of the longevity annuities that often fall short in tax deferments, may say without this option, they faced an uncertain future.

Those with retirement plans, including 401(k) plans, IRAs and others can earmark up to 25 percent – though no more than $125,000 for routing to these plans with no requirements of making an RMD on the funds. Those enrolled must begin taking payments on these annuities no later than age 85.

The goal for providers is to keep it simple; they’re not designed to offer a lot of intricacies, though there will be some leeway in terms of additional options, including even refunds for the purchase of the annuity should the person die before reaching the age of being able to use it. This is where good estate planning comes in, too.

Not only that, but new rules will also protect purchasers who exceed the 25 percent or $125,000 limit on premium payments, allowing them to correct the error without disqualifying the purchase. This is an added safety feature that will mean peace of mind for some. The money grows, the return is predictable to a large degree and frankly, the risks are minimal.

There are those who advocate a more aggressive effort, but for many, this is a safer option that fits well with many baby boomers. It’s less about the aggressive risk taking and more about the consistency and peace of mind. Remember, not everyone approaches finances in the same way. Options are what make the difference.

If you’d like to learn more about how they fit into your estate planning efforts, give us a call. We’re happy to explore the many options these new vehicles offer. In place for around a year, there’s no denying the many benefits they offer and what they can mean for the futures of many baby boomers.

  • Author
  • Recent Posts
Daniel DeBruyckere
Daniel DeBruyckere
Attorney Daniel A. DeBruyckere has been practicing law in New Hampshire and Massachusetts since 1998, and has helped hundreds of clients with their estate planning and elder care issues. He is very well respected in the area of estate planning, probate, trust administration, elder law issues, and business planning.
Daniel DeBruyckere
Latest posts by Daniel DeBruyckere (see all)
  • Concerned about Leaving a Large Inheritance? A Trust May Be the Solution - January 19, 2021
  • If You Are a Parent Estate Planning Is Essential - January 14, 2021
  • Is It Too Late for Medicaid Planning to Help Me? - January 12, 2021

Other Articles You May Find Useful

Retirement plan
Should Your Retirement Plan Include an IRA?
DeBruyckere Law Offices, PC | Estate Planning & Medicaid Attorneys
Staggering Statistics on Retirement Savings
DeBruyckere Law Offices, PC | Estate Planning & Medicaid Attorneys
Free Report: The Role of Legacy Planning
DeBruyckere Law Offices, PC | Estate Planning & Medicaid Attorneys
64 Year Old Newlyweds & Estate Planning
DeBruyckere Law Offices, PC | Estate Planning & Medicaid Attorneys
IRA Beneficiary Trusts for Children
DeBruyckere Law Offices, PC | Estate Planning & Medicaid Attorneys
Londonderry Retirement Planning: Yes, Women Do Have Different Concerns

DeBruyckere Law Offices, PC

Download our free Estate Planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.
  • This field is for validation purposes and should be left unchanged.

Subscribe to Our Newsletter

Please fill out the form below:
  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

Blog Subscribe

  • This field is for validation purposes and should be left unchanged.

Testimonials

I felt complete trust and confidence in Dan DeBruyckere and his staff. They have a caring, low-key approach and there is no pressure to add products to the estate plan; rather he makes me aware of changes in the law, etc. I always learn something new to assist me in our planning!

LN

Your seminar was the only seminar we attended without financial advisors wanting to invest our money instead of protecting it! The information this firm provided was easy to understand even though it is a difficult topic. Thank you for all of your help!

HR

We both felt so comfortable in they way our Estate Planning was handled. We felt like someone was watching out for our best interest. Everyone we worked with at the firm was thorough, and explained everything in a way where we could walk away feeling like everything was complete.

RS

A truly great experience all the way through. Felt like we were a part of the family! Thank you.

LW

We could not have picked a more qualified law firm. Everyone that we came in contact with made us feel at ease.

Happy Client

We were very impressed with the statements put forth by Dan at the Seminar. We were impressed even more by their down to earth approach and the efficiency they accomplished it all.

Charles

Londonderry Office

Londonderry Office
One Verani Way
Londonderry, NH 03053
Phone: (603) 894-4141

See Larger Map Get Directions

Nashua Office

Nashua Office
76 Northeastern Boulevard, Unit 31B
Nashua, NH 03062
Phone: (603) 894-4141

See Larger Map Get Directions

North Andover Office

North Andover Office
231 Sutton St, Suite 1B
North Andover, MA 01845
Phone: (978) 686-4645

See Larger Map Get Directions

Woburn Office

Woburn Office
444 Washington Street, Suite 503
Woburn, MA 01801
Phone: (978) 969-0331

See Larger Map Get Directions

By Appointment Only

BEVERLY OFFICE

Beverly Office
900 Cummings Center Suite 204-U
Beverly, MA 01915
Phone: (978) 969-0331

See Larger Map Get Directions

Office Hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 5:00 PM

Map

dadlawoffices_sidbr_map
  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
footer-logo

© 2021 DeBruyckere Law Offices
All Right Reseved.

Attorney Advertisement

© 2021 American Academy of Estate Planning Attorneys, Inc.