All retirement planning strategies should include a discussion of how taxes will impact your retirement income. This focus on ‘net retirement income’ has built increasing momentum for tax-free retirement planning. Many Americans will enter into retirement after years of a concerted effort to grow the largest retirement savings balance they can. For the last forty years, give or take, this has become known as the ‘accumulation years’. However, there’s a massive problem awaiting far too many – income taxes.

During the ‘retirement years’, most retirement plans create a non-structured ‘drawdown’ period. Basically, you’re drawing money from the total sum created during the ‘accumulation years’. Pretty simple, right? It is and that’s been a key attraction point for the industry as they’ve sold 401(k)s and IRAs as the ‘ideal solution for retirement’. The problem comes in the form of income taxes. You see, the money you draw from your retirement savings throughout your retirement is likely going to be taxed as income, similarly to how your paycheck was taxed throughout your career.

Taxes on your retirement income? Yes, and it could be very impactful on your ability to handle your expenses in retirement too.

A VestCred 7702 Plan is a retirement savings strategy that uses a specific type of life insurance to save money for retirement. Specifically, VestCred uses what is known as an Index Universal Life Insurance Policy. Just as any 7702 Plan would, the VestCred 7702 uses all of the tax advantages found in Section 7702 of the tax code.  Among many other advantages, the 7702 offers tax-free retirement income.


What are the key benefits of a VestCred 7702?

  • Avoid losses when the stock market falls.  Peace of mind.
  • Tax-free growth and Tax-Free retirement income.
  • Access money anytime for any reason without penalties.  It’s your money.
  • No contribution limits.


How does a Vestcred 7702 compare to 401(K) and an IRA?

Comparing retirement plans can be difficult. Below we’ve compiled your most commonly asked questions with answers for the three common types of retirement plans:


VestCred 7702 vs IRA vs 401(k)

Retirement Plans Compared: Tax Free VesCred 7702 vs 401(k) vs IRA
Learn more — Retirement Plans Compared

Do all life insurance policies provide you the same tax-free retirement benefits?

No. Not every policy has all of these benefits, and structuring a policy to maximize net-retirement income is not common practice for all insurers or retirement planners.  Most life insurance policies that people buy are structured to accomplish a different goal and will not achieve the results discussed here.


At VestCred, we can show you how to do this the right way and evaluate any policies that you currently own.


Questions?  We’re here to help! Give us a call at 888-654-4307 or email us at [email protected]