Two case studies show how dividend-paying whole-life insurance works as a retirement strategy. Mira deposited $500,000 over 10 years and withdrew $1.98M tax-free from age 65 to 90, leaving over $1M to beneficiaries. Dylan's corporation did the same and created a $3.5M tax-free capital dividend account on his death.
Questions this video answers
50
$50,000 per year for 10 years (total $500,000).
$45,817 per year, from age 65 to 90 (tax-free).
Approximately $1.98 million ("one point, almost $2 million").
She died at age 91; beneficiaries received over $1,000,000 income-tax-free.
Chapters
Well, start where you can. So whether it's half of it or whether it's more than that, that becomes based on your situation. And for Mira, that's what she could do. So she made that choice. And I just wanted to show you this today because it just gives you a snapshot of some of the living benefits that come with this amazing platform that we use for this process called.
We'Re going to look at some examples of passive income using this concept in order to do that. So first we're going to look at this.
Individual and then we're going to look at a business person. So the first person that we're going to look at today is Mira. Now Mira was focused on a retirement solution. And this is one thing that you can do using this process. You can end up with a retirement solution based on using this platform that we use for the process called becoming your own banker. Now mira was age 50 and her objective was to have 45,000 net annual retirement income from the age of 65 to 90. Now obviously none of us know how long the good Lord's going to give us time on this earth. So you set out with a plan and that was her plan. So in order to do that, she was depositing $50,000 into her dividend paying policy per year for 10 years. Now you may be looking at it and say, okay, well I couldn't do that. Well, start where you can. So whether it's half of it or whether it's more than that, that becomes based on your situation. And, and for Mira, that's what she could do. So she made that choice. So in total, she put in $500,000 in those 10 years. And then from age 65 till 90, Mira was able to access $45,817 per year, tax free. What I want you to understand today is a total that was paid out to Mira over Those years between 65 and 90 was one point, almost $2 million. Now.
Mira passes away at the age of 91. And what did she leave to her beneficiaries? Income tax free, over a million dollars. Now is that more or less than what she put into the system? Again, you know that, you know she had put in 500,000. So I just want you to ask yourself, is it easier to save 500 inside of a policy or to accumulate the 1.2 million inside of a mutual fund or an RRSP?
Now that's just a good question to think about. And this is the opportunities that you have with this process. This is one of the things That I started as part of my objectives when I started practicing the infinite banking concept. Now we're going to look at the business owner kind of case. So we're going to look at Dylan today. Now Dylan was also focused on a guaranteed retirement solution based on the fact he was a business owner. And Dylan happened to be age 45. And his objective was very similar to mirrors was to have $41,000 of retirement income from the age 65 to age 90. Now this being an incorporated business, the corporation deposited 50,000 a year into a corporately owned dividend paying whole life insurance policy for 10 years. So pretty simple math again, 500,000. Now the corporate tax on the daily cash value growth was zero. So if you know much about corporates and how they get taxed, especially when it comes to income generating, you know, properties that you have, this is a pretty good outcome. This is a great outcome. Zero tax on the growth. Now the passive income investment tax was zero based on, you know, the rules of a corporation. Then from age 65 until 90, Dylan was able to access $41,000 per year after tax. So that's, you know, paying the taxes that are going to be paid and still accessing $41,000 for all those years per year. So total out 1.066.
And when Dylan passes away at age 91, what happens? Well, the net death benefit which is going to go to the corporation was $806,000. Dylan's death gives rise to the capital dividend account. That's, that's a notional account that with this process the corporation would get credit for.
Now that CDA credit was $3.5 million.
And again.
Huge value for that corporation because now they can take those capital dividends out of that corporation tax free. And I just wanted to show you this today because it just gives you a snapshot of some of the living benefits that come with this amazing platform that we use for this process called the infinite banking concept here in Canada. And secondly, you know, even from a legacy, an estate planning perspective and how you can take capital, you know, revenue out of a corporation. Now sadly it happens at death. We're all going to die anyhow, so why not utilize a process that helps the next generation to actually get ahead and be able to have more access to money. So that's just a quick example of how that can work.
