For 2024, if you happen to make more than $153,000 as an individual you cannot contribute to a Roth IRA – per IRS limits. This means that people in high income, and high tax states such as NY and CA are disadvantaged twice, first for being a high earner and secondly for paying a lot in taxes on their savings & investments for retirement.

But there is a back door to tax free investing using life insurance which has no income limits, and you can withdraw at any age - certainly before 59.5.

Certain types of life insurance policies can serve as vehicles for tax-advantage investment. Here are the primary types that are commonly used for this purpose:

1. Whole Life Insurance:

This is a type of permanent life insurance that includes an investment component known as the cash value. The cash value grows at a guaranteed rate and the gains are tax-free. Policyholders can borrow against the cash value or even withdraw a portion of it under favorable tax rules. The policy's death benefit is generally tax-free to beneficiaries.

2. Universal Life Insurance:

Like whole life insurance, universal life offers a cash value component, but with more flexible premium payments and adjustable coverage amounts. The cash value grows based on a crediting rate, which can be tied to a market index in the case of indexed universal life, offering potentially higher returns. Like whole life, the gains are tax-free, and loans or withdrawals are possible under tax-advantaged conditions.

3. Variable Life Insurance:

This type of life insurance allows the policyholder to allocate part of the premium payments to various investment options, such as ETFs, and mutual funds. The cash value and the death benefit can vary based on the performance of these investments. Gains within the policy are tax-free, and as with other types of permanent life insurance, the death benefit is generally tax-free.

These life insurance policies can be particularly effective as part of a broader financial strategy, offering both life coverage and a mechanism for tax-efficient wealth accumulation. As it involves medical underwriting – a questionnaire and blood tests – the long term returns on such a plan are better for healthier people.

However, it's important to consider the costs, including premium payments and potential fees, and to ensure that the policy meets your overall financial goals and needs. Consulting with a financial advisor is the best way to find out if this is for you.