SOCIAL SECURITY BENEFITS: family financial legacy creation

January 30, 2023

2 minute read – “We’re about to begin collecting Social Security income benefits, but, can live off of other retirement assets. What else can we do to save and pass along this to our family?”

There are a few good reasons to collect your Social Security check, but, save it and pass it along to your children, or grand-children. Of course tax-beneficial savings is always a bonus when looking into this as well.

Life Insurance can be used as a powerful tool to leverage Social Security payments for future generations, creating a tax-beneficial plan.


  • A male age 69 and his 65 year old spouse were taking a total of $24,000 annually from Social Security that they didn’t need for income purposes.  Based on their tax bracket at the time they were netting approximately $14,000 per year.
  • After meeting with their insurance advisor-broker they decided to gift $14,000 per year into an Irrevocable Life Insurance Trust to fund a Survivorship Universal Life Insurance policy (aka: Second-to-Die policy: Insuring two lives, paying at the death of the last survivor). Typically this type of policy’s health underwriting is somewhat easier to get coverage than applying for two separate policies (one on each life).
  • This allowed them to purchase a $973,000 Life Insurance (death benefit) policy that would pay out to the trust, tax-free, helping them create a lasting legacy for their children and grandchildren for years to come.

For this couple the decision was rather simple.  Do nothing with the unneeded Social Security income or leverage that benefit to fund a legacy trust for the benefit of their heirs for years to come. Sometimes it’s not always this easy due to client’s serious health conditions, resulting in uninsurability. In these cases we might suggest pivoting to an annuity with the Trust recommendations and some related benefit  accumulation and payout designs.

Ask about Social Security Maximization Ideas.

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