For almost everyone else, the best way to incorporate life insurance into retirement planning is to buy a simple term life policy with an adequate death benefit and invest any other available income in tax-advantaged retirement accounts. You can also use life insurance for retirement by taking out a loan worth its cash value. Think of it as a loan you're receiving from your future self. Technically, you are not required to pay it back, although interest will accrue and, ultimately, the amount of the loan will be deducted from the death benefit (that is, the cash value of the policy is a reserve you can count on when you retire).
So, if you need a lump sum unexpectedly, you can withdraw it or borrow it from your life insurance account. You can generally apply for a loan under the policy up to the amount of the cash value without owing taxes. If you receive dividends, you won't owe taxes on them until they exceed the total amount of premiums you paid. If you don't feel adequately prepared, you can talk to a financial advisor who can help you set up a plan that will get you where you want to be and have the money you need to retire comfortably.
While life insurance plans are primarily designed to help you recover financially if you lose a loved one, they can also be used to help save retirement income. If you're already contributing the maximum amount to your 401 (k) or IRA, you may be ready to start using a permanent life insurance plan as a retirement strategy. My goal is to help you take the guesswork out of planning for retirement or to find the best insurance coverage at the lowest rates for you. There are a handful of situations where a retirement plan with life insurance can be especially beneficial.
Specifically, the cash value portion of a full life insurance plan can help supplement your current retirement savings.