If you've been lucky enough to build a nest egg that allows you to live comfortably in retirement without Social Security, congratulations! You've made smart decisions that already paid off.
But what if there was one more smart decision you could make...that turned your Social Security checks into a legacy for your children?
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Request a CallFrom Social Security to a Legacy
There are two ways to use your Social Security checks to generate an income-tax-free death benefit for your children. The right method depends on the overall value of your estate. As of 2024, the federal estate tax exemption is fixed at $13.61 million, with adjustments for inflation.
If you're confident your estate won't approach the $13.61 million mark, check out Method 1. If you think you're at or near that figure, check out Method 2. If you're not sure, give me a call and I'll help you prepare an estimate.
Method 1: Your Estate Is Valued at Less than $13.61 Million
Maximize your Social Security by using it to fund a life insurance policy. Your monthly benefit checks pay the policy's premiums. When you pass away, your heirs get a 100% tax-free death benefit.
Method 2: Your Estate Is Valued at More than $13.61 Million
Maximize your Social Security and lessen the possible estate tax burden by creating an Irrevocable Life Insurance Trust (ILIT). The trust would be funded with gifts from you, paid for with your Social Security. The trust is the official owner of the policy, which is what makes the proceeds generally estate-tax free as well as income-tax free.
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Request a CallThe Results
So how much more can you leave for your children if you use this strategy?
Let's say a married couple collects Social Security beginning when he is 68 and she is 64. Let's say they save it, invest it, and earn 2% interest per year. The first year, they'll end with about $19,500 after tax. If they pass away when he's 87 and she's 83, they'll leave about $516,500.
Let's say the couple used Method 2, described above. Starting with the same after-tax amount of $19,500, if they died at ages 87 and 83, their trust would have a net payment for their heirs of approximately $2,005,500.**
If you could leave that life-changing amount of money to your children or a charity, wouldn't you do it? All it takes is a phone call to get started.
➡️ Want to talk to a real person about maximizing your financial assets? Call or email me for a personalized consultation!
Request a Call*Center on Budget and Policy Priorities, "Social Security Benefits Are Modest," accessed 4/11/24
**Actual results subject to change. Always consult your accounting, legal, and tax advisors about your circumstances before implementing any recommendations.