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RMD's to Fund Life Insurance

If you have a need for life insurance coverage, are affluent, and won’t need your RMD’s to live on in retirement, you could use your RMD’s to purchase a life insurance policy so your beneficiaries could use the income-tax-free death benefit to pay the tax liability on the distributions from traditional IRA’s and qualified plans inherited from you.

At your death, the value of your IRA’s or qualified plans is included in your taxable estate. Your IRA beneficiaries’ distributions could be subject to state and federal income tax and potentially estate tax – resulting in a high tax bill. If your beneficiaries need to use these funds to pay the estate taxes, they will also be subject to federal and potentially state income taxes as well. Combined, these taxes could greatly reduce the value of your IRA or qualified plan for your beneficiaries.

With these factors in mind, consider how the death benefit provided by a life insurance policy may protect your beneficiaries and complement your overall financial strategy.


Amanda Wheelis joined Lake Advisory Group in early 2019, originally as an Administrative Assistant. Promoted in 2020, she now uses her organizational skills and drive for professional excellence in her role as a licensed independent...

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Cynthia De Hart joined Lake Advisory Group in the fall of 2020 as Marketing Director. She earned her MBA in Marketing from Xavier University and her Bachelor of Arts in Economics and Art History from Denison University. After her...

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Joshua Simpson

Vice President Operations

(352) 350-2008


Josh joined his father, Keith, at Lake Advisory Group in 2014. In 2020, he earned his MBA from St. Leo University in St. Leo, Florida. Josh uses disciplined research and analysis of industry investments and his broad knowledge of...

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As a fiduciary, Keith Simpson lives his values: hard work, discipline, and doing what is right by the client. Keith joined Lake Advisory Group in 2009 and liked it so much he bought it in 2015. Prior to joining Lake Advisory Group...

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