Life Insurance not Necessarily Right for Retirement Income
It is also very important to understand that we do not know what future tax rates will be. So it is not rational for a mission life insurance product with significant ongoing costs only buys for fear of future tax rates. I bet a really nice dinner that your life insurance seller does not mention this consideration.
Another thing to think about is that you need a fairly high income before taxes has become an important consideration in retirement. Thus, at least 15 percent of your Social Security income is not taxed. For most people, the amount is not taxed much higher. For a joint return, another $ 20,900 is not taxed because of the standard deduction, personal exemptions and deductions elderly. Then the first $ 16,700 of income taxed at only 10 percent and the next $ 51,200 is taxed at only 15 percent.
So you can be an income above $ 88,800 one year before you find yourself in the 25 percent tax bracket. Even if you have both a maximum earners ($ 106,800 with earnings per unit), you probably retirement income based on your Social Security and $ 560,000 in financial assets below $ 88,800, so taxes are not an important consideration.
