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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 is a supportive individual who specializes in the administrative tasks around the office and enjoys connecting with people. She grew up in Leesburg, Florida, and is currently attending the Ultimate Academy to earn her...

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Joshua Simpson

Investment Advisor Representative

(352) 350-2008

Born on Ft. Carson, just outside of Colorado Springs, Colorado, Joshua grew up in a military family and spent his youth living all over the country, meeting all different types of people.

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Keith A. Simpson, MBA, joined Lake Advisory Group in 2009. Prior to joining Lake Advisory Group Keith was a Financial Advisor at Merrill Lynch and MetLife. Keith graduated from Park College with a B.S. in Management.

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