Q. My wife just finished reading a book about “tax-free retirement.” The person who gave her this book is in financial product sales. The book recommends universal life insurance as a way to have a “tax-free retirement.” We’re wondering if it would be good for us.

Our situation is this. We’re 57 and 56. She has $280,000 in her company 401(k) and another $10,000 in a Roth. I have $178,000 in a company 401(k), $20,000 in a Roth, and $72,000 in an IRA. We both have insurance through our workplace. I have added an extra life insurance policy for $185,000 which also includes a CAF (cash accumulation fund) with about $4,000 in it. This policy is portable and happens to be a group universal life policy.

I also have a pension from my former employer for $747 a month. We went with no survivorship for this pension, because it would have only been $350 for her. We figured to continue to extend my portable life insurance for 5 to10 years after retirement, or to a point it wouldn’t make sense to continue. My wife also receives restricted stock units every other year and we put 25 percent of our wages in the 401(k) plans.

Here’s the issue. My wife seems determined to switch everything over to this new universal life insurance to retire tax-free. I see this as just a life insurance annuity and don’t feel we need to do this. This “tax free” book suggests that our 401(k) s will be taxed higher in retirement than we are paying now. Should we move funds into life insurance annuities… or just keep saving as we are? What are the pros and cons here? Is it important to retire “tax-free”? —K.V., by email

A. Don’t put the cart before the horse. Spendable income is the most important consideration for retirement planning. What you pay in taxes is a secondary consideration. Lots of inappropriate investments are made because people are tax phobic first and personal benefit concerned second.

It’s also very important to understand that we don’t know what future tax rates will be. So it isn’t rational to buy a commissioned life insurance product with significant ongoing expenses just for fear of future tax rates.

Another thing to consider is that the tax deferred accumulation of interest in a cash value life insurance policy is exactly the kind of “tax preference” that is likely to be a victim of future tax code overhauls. The reason for this is simple: Sales of whole life and universal life policies go to the wealthiest households in America. Sales of term life go to ordinary working Americans. With the top 10 percent of households owning 55 percent of all life insurance (according to the Federal Reserve) defending that tax deferral benefit is going to get more and more difficult.

I’ll bet a really nice dinner that your life insurance sales person did not mention this consideration. I’d also be willing to bet that the life insurance salesperson didn’t spend a lot of time on how these policies can blow up if you live a long time making those tax-free withdrawals. Ask her to walk you through what happens to the policy at age 80 or 85 if you make regular withdrawals and it has only delivered the guaranteed earnings rate. You could be asked to write a very large check.

Another thing to think about is that you need to have a pretty high income before income taxes become a major consideration in retirement. For instance, at least 15 percent of your Social Security income will not be taxed. For most people the amount not taxed will be much larger. For a joint return another $20,900 is not taxed due to the standard deduction, elderly deduction, and personal exemptions. After that, the first $16,700 of income is taxed at only 10 percent and the next $51,200 is taxed at only 15 percent.

So you can have an income over $88,800 a year before you find yourself in the 25 percent tax bracket. Even if you are both maximum earners (with $106,800 of earned income each) your likely retirement income based on Social Security and your $560,000 in financial assets is under $88,800, so income taxes aren’t a major consideration. Rather than buy a life insurance policy, you could put more money into a Roth IRA. This offers tax-free withdrawals with no cumbersome insurance strings attached.