Deciding between purchasing Tennessee life insurance or investing in a 401k plan can be challenging, as are most major financial decisions in life. Both of these come with benefits and costs compared to each other. The best financial decisions come down to weighing the costs and benefits. Learning more about the pros and cons of 401k and life insurance can help you make that choice. If you ever have any questions about financial situations like bankruptcy, then feel free to talk to a Tennessee bankruptcy lawyer for guidance.
Tennessee Life Insurance Versus 401k Plan
Tennessee life insurance and 401k plans both come with benefits and certain restrictions depending on the type of plan you choose and your circumstances. Both of these options have the potential to help you with your retirement plans, but each of these also come with different perks
Whole life insurance offers access to the money you need when you need to use the money for important life expenses like medical bills or college. Since a 401k plan is regulated by the Internal Revenue Service (IRS), you will be controlled on what you can spend during your retirement and you will not be able to access any money at all until you reach the age of 59-and-a-half. Technically, you can still spend money from your 401k before that age, but with a 10% fee.
A 401k plan is taxed while whole life insurance is not. This means that if you wanted to leave money behind for your family after you pass away and you did this with a 401k plan, the money left behind would be taxed, meaning you may not leave behind as much money as you originally intended. Many people actually run out of money under 401k plans, partially because of taxes, whereas people with whole life insurance have a better chance of not running out of money.
Benefits of Tennessee Life Insurance
There are several benefits of Tennessee life insurance. One of the main benefits is having an inheritance for your relatives when you pass away. If you do not have an inheritance, life insurance can cover this for you, along with providing income for any dependents in your family. This means less worry about your loved one’s finances in the event of you passing away.
Life insurance can also cover funeral expenses, estate administration costs, and medical bills. There is also cash value that can be derived from life insurance if you buy an insurance policy that includes cash-value. This can help you put money into your savings. One other perk of life insurance is all the options you have. You can choose between Tennessee term life insurance and whole life insurance,
Bankruptcy Attorney in Chattanooga, TN
Deciding between life insurance and a 401k plan can come with a lot of pressure. If you ever have any questions about this or bankruptcy, seek help from our lawyers in Chattanooga, Tennessee, and North Georgia. Call Tom Bible Law at (423) 424-3116 to speak with a Bankruptcy attorney in Tennessee for a free consultation today. Our legal team of Tennessee bankruptcy lawyers is located in Chattanooga, Kingsport, and Tullahoma.