IRA distribution for either Roth IRA Convesion or to buy Life Insurance

Submitted by JOEL GESINK on Mon, 2021-03-22 14:36

After reading Ed’ new book “The New Retirement Savings Time Bomb” – Ed talks about converting traditional IRA to Roth IRs and /or buying a permanent cash-value life insurance from the distributions from your IRA. How do you know which 1 is better to do?



Submitted by Bruce Steiner on Tue, 2021-03-23 22:27

They are unrelated.  If someone would suffer a hardship if you died early, you should buy life insurance.  There are other situations where life insurance would be appropriate as well, though the above is the primary one.
Bruce Steiner

Submitted by JOEL GESINK on Wed, 2021-03-24 13:01

Thank you Bruce – so your opinion is probably conversion to Roth is a better way to drain an IRA (after 59 1/2) then use it for Life Insurance   -unless like you mentioned above  a surving spouse may need a lump sum immediately after the policy-holder passed away?

Submitted by gautam SHAH on Thu, 2021-03-25 11:56

roth convertion will have tax free growth but if you have large IRA at second death  estate taxes will take away significant portion. How to balance as life insurance is expensive as age goes beyond 60 years. 

Submitted by JOEL GESINK on Fri, 2021-03-26 04:27

Thanks  – when you say “large IRA at second death” – how large do you mean?  Thanks!

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