The Three Bucket Concept

Taxable, tax deferred, and tax-free refer to the tax treatment of any gains or growth from these assets. Redistribution of assets may cause tax consequences. Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own professionals before making decisions related to your personal circumstances.

¹ Certain interest, although exempt from federal income tax, may still be reportable to the IRS and, in certain circumstances, may be subject to the alternative minimum tax (AMT).

² The primary purpose of cash value life insurance is to provide a death benefit. Cash value life insurance is not a retirement account, unlike a Roth IRA. Cash value life insurance is not an interest-bearing debt obligation, like a muni bond. Cash value life insurance does generally offer tax-free access to the cash value; however, accessing the cash value will reduce the policy's available cash surrender value and life insurance benefit. Also, certain tax advantages are no longer applicable to a life insurance policy if too much money is put into the policy during its first seven years, or during the seven-year period after a “material change” to the policy.
AR05050.112021 SMRU1731987 (Exp.12.01.2023)