Can You Roll a 401(k) Directly Into an IUL?

You’ve got money sitting in a 401(k).

Maybe it’s $500,000.

Maybe it’s $1 million.

Maybe you’ve changed jobs and you’re trying to figure out what to do with an old plan.

Then somebody starts talking to you about indexed universal life and says:

“You can roll your 401(k) into an IUL.”

That phrase needs to be cleaned up immediately.

A direct tax-free rollover from a 401(k) into an indexed universal life insurance policy is not the same type of rollover you can make from an eligible retirement plan to another eligible retirement plan or IRA.

An IUL is life insurance.

It is not an IRA.

It is not a 401(k).

And it is not an eligible retirement-plan rollover destination.

So Can You Move 401(k) Money Into an IUL?

Money that ultimately comes from a 401(k) can potentially be used to pay life insurance premiums if you are eligible to take a distribution and the insurance arrangement is appropriate.

But that’s very different from saying:

“I’m doing a tax-free 401(k)-to-IUL rollover.”

If pretax 401(k) money is distributed to you and then used to fund an IUL, the retirement-plan distribution can generally create taxable income under current federal rules.

Other tax consequences can also apply based on your age, the type of distribution, the plan, and your circumstances.

That’s why the wording matters.

A Real Rollover Keeps the Money Inside the Retirement System

Think about a common retirement-plan rollover.

You leave your employer.

You have an eligible 401(k) balance.

You complete a properly structured direct rollover to a traditional IRA.

The money generally remains inside the tax-deferred retirement system rather than being treated as a currently taxable distribution to you.

You haven’t turned the retirement money into life insurance.

You’ve moved eligible retirement money from one retirement arrangement to another eligible retirement arrangement.

An IUL Sits Outside That System

An indexed universal life policy is a life insurance contract.

That creates completely different rules.

You fund the policy with premium.

The policy provides life insurance coverage.

It may accumulate cash value.

Indexed interest may be credited according to the policy’s applicable terms.

And properly structured policy values may later become part of a retirement-income strategy.

But putting money into an IUL isn’t the same transaction as rolling a 401(k) into an IRA.

Here’s the Question to Ask Anyone Who Says “Roll Your 401(k) Into an IUL”

“Show me exactly what happens between the 401(k) and the life insurance policy.”

Don’t settle for:

“We move the money over.”

Move it how?

Is there a distribution?

How much of the distribution is taxable?

Is any additional tax potentially applicable?

How much money is actually available to fund the policy after taxes?

How many years will the policy be funded?

What happens if the insurance underwriting isn’t approved as expected?

Those questions matter.

Here’s a Simple Example

Imagine you’re 62.

You recently retired.

You have $800,000 in a former employer’s traditional pretax 401(k).

Someone tells you:

“Let’s roll $200,000 of that into an IUL.”

Before signing anything, ask:

“Is that $200,000 actually being rolled directly into the policy without current taxation, or are you proposing that I take taxable retirement distributions and use the after-tax proceeds to pay insurance premiums?”

Those are not the same thing.

Why This Can Create a Large Tax Problem

A large distribution from a traditional pretax 401(k) can potentially create a large amount of taxable income in one year.

That can affect more than the tax owed on the distribution itself.

Additional income can interact with other parts of your financial life.

For a retiree, that can include items such as:

• Federal income-tax brackets
• State income taxes where applicable
• Taxation of Social Security benefits
• Medicare income-related premium adjustments in later measurement periods
• Other income-sensitive tax provisions

So if somebody wants to distribute a large amount from your 401(k) to fund life insurance, don’t look only at the policy illustration.

Look at the tax return too.

What If You Roll the 401(k) Into an IRA First?

This is another place where the language can become confusing.

Someone might say:

“We’ll roll your 401(k) into an IRA first, then move it into the IUL.”

The first transaction may qualify as a tax-free rollover if completed correctly and if the funds are eligible.

But that doesn’t make the later movement from the IRA into life insurance a tax-free rollover.

If traditional pretax IRA money is distributed and used to pay IUL premiums, the IRA distribution is generally taxable under current federal rules to the extent applicable.

Adding an IRA in the middle doesn’t magically turn life insurance into a qualified rollover destination.

What About a Roth 401(k)?

That needs separate analysis.

Designated Roth money has different tax characteristics from traditional pretax 401(k) money.

Qualified Roth distributions are generally tax-free under current federal rules when the applicable requirements are satisfied.

But an IUL still doesn’t become a Roth rollover destination.

The tax characteristics of a distribution and the question of where retirement-plan assets can be rolled are two different issues.

What If You’re Still Working?

You may not even have unrestricted access to the 401(k) money you’re trying to use.

Your employer plan and applicable law control when distributions are available.

Changing jobs, retiring, reaching an applicable age, hardship provisions, plan termination and other circumstances can affect distribution availability.

Don’t assume:

“It’s my 401(k), so I can pull it out whenever I want.”

Check the actual plan first.

And Don’t Confuse a 401(k) Loan With an IUL Policy Loan

They’re completely different arrangements.

A participant loan from a 401(k), when available under the plan, is governed by qualified-plan rules and the specific plan document.

An IUL policy loan is indebtedness against a life insurance policy under the policy’s contractual provisions.

The repayment rules, tax risks, interest mechanics and consequences are different.

The word “loan” doesn’t make them interchangeable.

Do You Need to Touch Your 401(k) at All to Use an IUL?

No.

And this is the part I think gets lost when people hear “401(k) to IUL.”

You can evaluate an IUL as a separate financial strategy using available cash flow without liquidating an existing 401(k).

For some people, that can make much more sense to analyze.

Keep the existing retirement assets where they are or move them to another appropriate retirement arrangement.

Then fund the IUL from current cash flow or another appropriate source.

Now you’re building another retirement bucket rather than automatically triggering taxes just to change financial products.

For Example, You Could Have Both

Imagine you’re 50.

You have $700,000 in your 401(k).

You’re still working.

Your employer matches contributions.

You also have $10,000 of additional annual cash flow you want to dedicate toward retirement.

The question doesn’t have to be:

“How do I get the $700,000 out of my 401(k) and into an IUL?”

A better question may be:

“What happens if I leave the $700,000 retirement account alone and build a second retirement-income strategy with the $10,000 per year?”

Now we can compare the future income from both buckets.

This Is Where the IUL JUMP Strategy Becomes Relevant

The IUL JUMP Strategy is designed around annual policy funding and a Matching Indexed Participating Loan.

It does not require pretending that an existing 401(k) can be rolled directly into life insurance tax-free.

Using our common $10,000 annual client-contribution example, the progression can look like this:

By Year 11 in this example, the client is still contributing:

$10,000 out of pocket.

The additional $50,000 shown comes from the Matching Indexed Participating Loan.

Total annual funding shown becomes $60,000.

That Extra Funding Is Not Free Money

The Matching Indexed Participating Loan is an actual policy loan.

It creates indebtedness.

The loan proceeds are redeployed into the policy as additional funding under the strategy.

And the loans accumulate.

When a later JUMP occurs, it doesn’t simply wipe out the previous loans.

That’s why any projection needs to show both:

The additional loan-funded policy value.

And:

The accumulated policy indebtedness.

Think About the JUMP Strategy as Two Buckets

Bucket One: the money the client contributes.

Bucket Two: the accumulated Matching Indexed Participating Loan money that’s redeployed into the policy.

Under the indexed strategy used in our example, both buckets have the same potential 10% cap and 0% indexed-crediting floor.

The loan-funded dollars also carry the applicable loan cost.

The Current Applicable Loan Rate Is 5%

With the policy structure we currently use for the IUL JUMP Strategy, the applicable loan rate is currently 5%, with a contractual maximum loan rate of 6% for the applicable loan feature.

That doesn’t mean 5% is guaranteed to remain the applicable rate.

A serious analysis should also stress-test the strategy at the contractual 6% maximum.

Where Does the 6.87% Historical Indexed-Crediting Example Come From?

One historical analysis used with this strategy examined annual S&P 500 price changes from 2006 through 2020.

Dividends were excluded because the policy isn’t directly invested in the index.

The analysis applied a 10% cap and 0% indexed-crediting floor.

Negative annual index price changes were treated as 0% for purposes of the indexed-crediting calculation.

Positive annual price changes above 10% were limited to 10%.

Under those assumptions, the period produced a:

6.87% historical average indexed-crediting result.

That’s not the historical return of the S&P 500.

It’s not a guaranteed future IUL crediting rate.

And it’s not a guaranteed policy return.

The Modeled Positive-Arbitrage Concept

Using that 6.87% historical indexed-crediting result and the current applicable 5% loan rate:

6.87% – 5.00% = 1.87 percentage points.

That’s the modeled positive spread.

If applicable indexed crediting exceeds the loan cost, the loan-funded portion can experience favorable economics under the model.

If indexed crediting comes in at 0% while the applicable loan rate is 5%, the economics are unfavorable for that period.

Positive arbitrage is not guaranteed.

What Happens as the JUMP Progression Builds?

Under assumptions used in one JUMP analysis, the combination of the base indexed-crediting assumption and the positive-arbitrage effect attributed to successive Matching Indexed Participating Loans produced modeled effective results of approximately:

• 8.74% at the Year 3 JUMP
• 11.61% at the Year 5 JUMP
• 14.48% at the Year 7 JUMP
• 17.35% at the Year 9 JUMP

Those are modeled effective results under the assumptions used in that analysis.

They are not S&P 500 returns.

They are not IUL indexed-crediting rates.

They are not guaranteed policy returns.

Policy costs and other factors still have to be included.

What Does Any of This Have to Do With Your Existing 401(k)?

It gives us a different question to ask.

Instead of:

“Can I roll my 401(k) into this?”

Ask:

“Should I keep my existing retirement money in the qualified retirement system and build a separate IUL JUMP Strategy alongside it?”

Now you’re comparing strategies without automatically creating a taxable distribution from the existing account.

But What If You Actually Want to Use 401(k) Distributions to Fund the IUL?

Then model the taxes before touching the money.

Suppose you want $30,000 per year going into a life insurance strategy.

If that $30,000 is coming from a taxable traditional 401(k) distribution, you may need to distribute more than $30,000 to have $30,000 available after taxes.

The actual amount is affected by your tax situation.

That tax cost belongs in the comparison.

Don’t compare $30,000 of pretax retirement assets with $30,000 of after-tax insurance premium as though those are automatically equivalent dollars.

This Is Especially Important Near Retirement

You’re 63.

You’re finally done working.

You have $1.3 million in your old 401(k).

You’re about to start Social Security.

Medicare is around the corner or already part of your life.

This is not the time to casually create a six-figure taxable distribution because someone used the word “rollover.”

Run the tax projection first.

Sometimes a Multi-Year Strategy May Be Evaluated Instead

If someone is intentionally using taxable retirement distributions to fund life insurance, spreading distributions across multiple years may create a different tax result from taking one large distribution.

But that is a tax-planning question.

The amount, timing, brackets, other income, Medicare considerations and policy-funding limits all need to be evaluated.

FPP Financial doesn’t provide tax or legal advice, so qualified tax professionals should be involved where appropriate.

Don’t Forget the MEC Limit

You also can’t simply dump an unlimited amount of money into an IUL and assume all of the intended tax characteristics remain unchanged.

Life insurance policies are subject to tax rules, including Modified Endowment Contract testing.

How much premium can be placed into the policy without causing a MEC under the intended design is affected by the policy structure and applicable tax rules.

The JUMP Strategy uses planned death-benefit increases to create additional funding capacity while seeking to maintain the intended non-MEC structure.

But future increases require approval, and actual policy design and tax testing control the outcome.

Future JUMPs Are Not Guaranteed

Each planned future JUMP requires a new application and carrier approval for the increased death benefit.

Qualification can be affected by:

• Health
• Income
• Employment
• Existing insurance
• Driving history
• Occupation
• Hazardous job duties
• Risky hobbies
• Other underwriting factors

If your strategy assumes future JUMPs, those future approvals should never be treated as guaranteed at the original policy issue.

What If You Don’t Qualify for the Next JUMP?

Under the mechanics we’re discussing, a missed JUMP can pause the progression rather than automatically resetting the strategy.

If you’ve already reached a particular matching-loan level and the next planned JUMP isn’t approved, the previous successful progression doesn’t automatically disappear under the mechanics described here.

You may remain at the previously achieved level and potentially reapply at a later policy anniversary, subject to actual carrier rules and approval.

The retirement projection should then be updated.

What About the Up-to-300% Retirement-Income Comparison?

This is where people can make another mistake.

In certain modeled comparisons we’ve evaluated, the IUL JUMP Strategy has produced up to approximately 300% more projected retirement income than the 401(k), Traditional IRA, or comparable tax-deferred retirement strategy being evaluated.

That does not mean:

“Pull your entire 401(k) out and put it into an IUL.”

Those are completely different statements.

A 300% Modeled Income Advantage Does Not Erase the Tax Cost of Moving Money

If you’re evaluating the JUMP Strategy using new annual cash flow, run that comparison.

If you’re evaluating it using taxable distributions from an existing 401(k), run that comparison instead.

They’re not interchangeable.

If taxes are incurred to get the money out of the 401(k), put those taxes into the model.

If the distribution affects Medicare costs, include that where applicable.

If an additional tax applies to an early distribution, include it where applicable.

Then see what the strategy produces.

The 300% Isn’t the Sales Pitch. It’s the Question.

Ask:

What was the starting contribution?

Was it pretax or after-tax money?

Were taxes accounted for?

Was an employer match included?

What market return was assumed?

What IUL indexed-crediting assumption was used?

Were policy charges included?

Were policy loans included?

What loan rate was modeled?

Were future JUMPs assumed?

How long did retirement last?

What happened at death?

Don’t just believe the 300% number. Make the strategy prove where the difference comes from with the math.

Then Stress-Test the JUMP Side

Lower the indexed-crediting assumption.

Raise the applicable loan rate to the contractual 6% maximum.

Do both at the same time.

Remove a future JUMP.

Extend retirement to age 95.

Increase the retirement-income need.

Then stress-test the 401(k) side too.

Use stronger market returns.

Use weaker ones.

Use different tax assumptions.

Then compare again.

We’ve Also Seen Approximately 40% More Projected Retirement Income Than a Traditional IUL in Certain Modeled Comparisons

In certain modeled comparisons we’ve evaluated, the JUMP Strategy has produced approximately 40% more projected retirement income than the traditional IUL structure being compared.

That comparison is about IUL design.

It does not turn an IUL into a qualified rollover destination.

These are separate issues.

The loan structure can affect projected retirement income.

The tax rules determine how retirement-plan money can be moved.

Here’s What I Would Compare Before Using a Dollar of Your 401(k)

First, model keeping the retirement money inside the retirement system.

What happens if you leave the 401(k) where it is?

What happens if an eligible balance is rolled to an IRA?

What does the projected retirement income look like?

What are the projected taxes?

Then model the proposed IUL separately.

If the IUL Is Being Funded With New Cash Flow, Show Me:

• Annual out-of-pocket premium
• Policy charges
• Cost of insurance
• Indexed-crediting assumptions
• Matching Indexed Participating Loans
• Accumulated policy indebtedness
• Current 5% applicable loan rate
• Contractual maximum 6% loan rate
• Future JUMP assumptions
• Projected retirement distributions
• Policy durability
• Projected net death benefit

If the IUL Is Being Funded From 401(k) Distributions, Add:

• Gross retirement-plan distribution
• Taxable amount
• Estimated federal tax
• Estimated state tax where applicable
• Potential additional tax where applicable
• Potential Medicare-related effects where applicable
• Net amount actually available for premium

Now you’re comparing the real transaction.

Why This Question Gets Emotional Near Retirement

If you’re 58 or 62 with $1 million or more in a 401(k), that money may represent 30 years of your life.

Paychecks.

Bonuses.

Employer matches.

Market crashes you sat through.

Years when you wanted to spend the money but saved it instead.

So when somebody says:

“Move your 401(k) into this.”

you’re not just moving numbers on a spreadsheet.

You’re making a decision with money you may never have enough working years to replace.

That’s Why the Word “Rollover” Can Feel So Comforting

It sounds routine.

Administrative.

Safe.

Like moving money from one bank account to another.

But if the proposed transaction actually requires a taxable distribution, you need to know that before the money moves.

Not after.

The Real Thought Is Usually Something Like This

“I’ve worked too long to get cute with this money now.”

And underneath that:

“What if we mess this up and regret it?”

You don’t want to realize at 68 that a decision you made at 62 created taxes, policy problems, or retirement-income consequences you didn’t understand.

You Want to Stay in Control

You’ve probably spent your adult life handling your own finances.

You raised your family.

You built your retirement savings.

You figured things out.

You don’t want retirement to be the point where that changes.

“I don’t want to ask my kids for help.”

“We should be able to handle this ourselves.”

That’s why understanding the transaction matters as much as understanding the illustration.

So, Can You Roll a 401(k) Directly Into an IUL?

Not as a direct tax-free rollover from an eligible 401(k) into a life insurance policy.

An IUL is not an eligible retirement-plan rollover destination.

If eligible 401(k) money is distributed and then used to fund life insurance, the distribution can create current taxation and potentially other consequences based on the circumstances.

If somebody tells you otherwise, ask them to show you the exact tax mechanics in writing and review the transaction with a qualified tax professional.

You May Not Need to Move the 401(k) at All

This is the bigger takeaway.

You can compare your existing 401(k) retirement strategy against an IUL JUMP Strategy without automatically liquidating the 401(k).

You can also model what happens when both strategies exist together.

That can be much more useful than starting the conversation with:

“How do we move all this money?”

How We Look at It at FPP Financial

At FPP Financial, we use our Retirement Math Method™.

If you walk in with an $800,000 401(k), I don’t want to start by figuring out how to move $800,000 into an insurance policy.

I want to know what the $800,000 is projected to do.

How much retirement income can it produce?

What taxes are projected?

What market assumptions are being used?

What happens if we leave it alone?

Then let’s look at the IUL JUMP Strategy.

Could we fund it from current cash flow?

Could it create another retirement-income bucket?

If you intentionally want to use retirement distributions to fund it, what tax cost does that create?

Then run the math.

We don’t sell you a retirement strategy. We run the math and let you decide.

Want to Compare Your 401(k) With the IUL JUMP Strategy?

If you have an old 401(k), a current employer plan, or a large retirement balance and you’re wondering whether an IUL should be part of your retirement strategy, we can model the choices side by side.

We’ll separate a legitimate retirement-plan rollover from a taxable distribution used to fund life insurance.

We’ll look at the existing 401(k).

We’ll look at the taxes.

We’ll look at the IUL policy charges.

We’ll look at the Matching Indexed Participating Loans.

We’ll stress-test the current 5% applicable loan rate against the contractual 6% maximum.

We’ll lower the crediting assumptions.

We’ll test future JUMP approvals.

Then we’ll compare projected retirement income.

If leaving the 401(k) alone produces the stronger result, you should see it.

If keeping the 401(k) while building a separate IUL produces a stronger modeled retirement structure, you should see that.

If intentionally taking distributions to fund an IUL produces a compelling result even after accounting for taxes, you should be able to see exactly why.

The number isn’t the reason to buy it. The assumptions behind the number are what you need to understand.

The 300% isn’t the sales pitch. It’s the question.

Show me exactly where the difference comes from.

Let the math do the talking.

Schedule Your Tax-Free Retirement Strategy Meeting

Explore More

• IUL JUMP Strategy vs. 401(k): Which Can Produce More Retirement Income?
• Should High-Income Earners Use an IUL After Maxing Out a 401(k)?
• What Is the IUL JUMP Strategy and How Does It Work?

Disclosure

This material is for educational purposes only and is not intended as individualized investment, securities, tax, legal, retirement-plan or insurance advice. Indexed universal life insurance is not a qualified retirement plan or IRA and is not an eligible destination for a direct tax-free rollover from a 401(k).

Eligible distributions from qualified retirement plans may generally be rolled into certain eligible retirement plans or IRAs when applicable requirements are satisfied. A distribution from a traditional pretax 401(k) that is not properly rolled to an eligible retirement arrangement can generally create current taxable income. Additional taxes may apply to certain distributions. Distribution availability, withholding, rollover eligibility and tax treatment are affected by applicable law, plan provisions and individual circumstances.

A properly completed rollover from an eligible 401(k) to an IRA does not make a later distribution from the IRA to fund life insurance a tax-free rollover into life insurance. Traditional IRA distributions are generally taxable to the extent applicable under current federal rules. Roth accounts and qualified Roth distributions have different tax treatment.

Large taxable retirement-plan distributions may affect federal and state income taxes and can interact with other income-sensitive provisions. Medicare income-related premium adjustments generally use modified adjusted gross income from an earlier tax year under applicable rules. Social Security taxation and other tax consequences can also be affected by income. Consult qualified tax professionals before implementing a strategy involving retirement-plan distributions.

Indexed universal life insurance is permanent life insurance and is not a qualified retirement plan, Roth IRA, brokerage account or direct investment in a market index. IUL policies do not own the underlying index securities and do not receive index dividends. Indexed interest is determined according to applicable policy crediting terms, which may include caps, participation rates, spreads and other provisions.

A 0% indexed-crediting floor does not guarantee that overall IUL policy value cannot decline. Policy charges, cost of insurance, loan costs, withdrawals and other policy mechanics continue to apply. Caps, participation rates, spreads, loan rates and other nonguaranteed elements may change when permitted by the insurance contract.

Policy loans are actual policy indebtedness and generally accrue applicable loan charges. Loans and withdrawals can reduce policy values and death benefits and may increase lapse risk. Outstanding policy indebtedness generally reduces the net death benefit payable under the insurance contract.

Policy values from a properly structured and maintained non-MEC life insurance policy may potentially be accessed through withdrawals to basis and policy loans without current income taxation under current federal rules, subject to applicable requirements. Tax treatment can be affected by basis, Modified Endowment Contract status, policy lapse, surrender and other circumstances. A policy that lapses or is surrendered with gain and outstanding indebtedness may create taxable income.

Matching Indexed Participating Loans are policy loans. They are not employer contributions, free carrier contributions, bonuses, tax credits, guaranteed gains or direct investments in a market index. Under the JUMP Strategy described here, Matching Indexed Participating Loan proceeds are modeled as being redeployed into the same policy as additional funding. Associated indebtedness and applicable loan costs remain part of the policy economics.

The JUMP Strategy is modeled with applicable loan charges carried forward during the accumulation design rather than requiring the client to pay those charges out of pocket each year. This does not eliminate the economic cost of borrowing, guarantee positive arbitrage or guarantee that policy values will remain sufficient to support outstanding indebtedness.

References to the $10,000 annual contribution example, JUMP progression, 6.87% historical indexed-crediting example, 1.87 percentage-point modeled positive spread, modeled effective results of 8.74%, 11.61%, 14.48% and 17.35%, current 5% loan rate, contractual maximum 6% loan rate, approximately 40% more projected retirement income, or up to approximately 300% more projected retirement income are illustrative and are not guarantees of future policy performance, positive arbitrage, policy durability, funding capacity, non-MEC status, future JUMP approval, death benefit or retirement income.

The up-to-approximately-300% projected retirement-income result cited in this article refers to certain modeled comparisons involving the IUL JUMP Strategy and a 401(k), Traditional IRA or comparable tax-deferred retirement strategy. It should not be interpreted as a recommendation to distribute or liquidate a 401(k), as a claim that an IUL is an eligible tax-free rollover destination, or as a guarantee that any individual comparison will produce the same result. When retirement-plan distributions are proposed as a source of IUL premiums, applicable taxes and other consequences should be included in the comparison.

The approximately-40% projected retirement-income result refers to certain modeled comparisons involving the JUMP Strategy and the traditional IUL structure being evaluated. It is not a universal result and does not guarantee future retirement income.

The historical 6.87% indexed-crediting example discussed in this article is based on an analysis of annual S&P 500 price changes from 2006 through 2020, excluding dividends, and applying the stated 10% cap and 0% indexed-crediting floor. Historical results do not predict future policy performance. The modeled effective JUMP results discussed above are not S&P 500 returns, indexed-crediting rates or guaranteed policy returns.

Positive arbitrage is not guaranteed. Periods in which indexed crediting is below the applicable loan cost can produce unfavorable loan economics. Policy charges and other expenses must also be considered when evaluating overall policy performance.

Future JUMPs and associated death-benefit increases are subject to carrier approval and applicable medical, financial, occupational and other underwriting requirements. Future approval is not guaranteed. Income, employment, health and other circumstances can affect future underwriting. Failure to complete a planned future JUMP can materially change projected funding, policy values, indebtedness, death benefits and retirement-income results.

Policy-specific guarantees, nonguaranteed elements, loan provisions, loan rates, caps, participation rates, spreads, crediting methods, expenses, surrender provisions, MEC testing, lapse provisions and death-benefit provisions should be verified against current carrier-approved illustrations and the actual insurance contract.

Tax laws and retirement-plan rules can change. FPP Financial does not provide tax or legal advice. Consult qualified tax, legal and retirement-plan professionals before taking a distribution, completing a rollover, funding life insurance with retirement assets or implementing any strategy discussed here.