7702 Plan
A retirement savings strategy using permanent life insurance structured under Internal Revenue Code Section 7702 to provide tax-advantaged accumulation and tax-free retirement income through policy loans.
Understanding 7702 Plan
Section 7702 of the Internal Revenue Code defines what constitutes a life insurance contract for federal income tax purposes. Life insurance policies that qualify under this section receive special tax treatment including tax-deferred growth and tax-free death benefits. When structured properly, the cash value in these policies can be accessed through tax-free policy loans in retirement.
Why This Matters for Retirement: Understanding 7702 Plan is essential for making informed decisions about tax-free retirement income strategies. Whether you are evaluating an IUL policy, planning Roth conversions, or comparing retirement vehicles, this concept directly affects your outcomes.