@flashjh wrote:
Just want to add to this statement "About the only way to get assets from an insurance policy to an IRA is to cash in the policy and contribute the money to the account. However, you'll have to treat the money as taxable income". That is true, but only the net gain on the life insurance policy is income...
Proceeds from an insurance policy, taxable or not, is NOT taxable *compensation* that can be used to fund an IRA. Taxable compensation is money that you worked for such as W-2 wages or self-employed income, with a few exceptions. Also, for 2019, the maximum that can be contributed to an IRA is $6,000 ($7,000 if over age 50).
See IRS Pub 590A "What is compensation" for IRA contributions for details.
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
