Jayson Lowe shows how to build retirement income using participating whole life insurance. A 50-year-old contributes $50,000 yearly for 10 years, then takes tax-free loans to generate $45,000 annual income from 65 to 90. The strategy relies on guaranteed cash-value growth instead of market returns.
Questions this video answers
50
$45,000 per year (from age 65 to 90).
$50,000 per year for 10 years (total $500,000).
Approximately $45,008.17 per year (accessed via policy loan from age 65 to 90).
Because retirement is not a destination, it's a mindset. See, when you compare things, it's obvious which one is better. But comparing is how we make the decision. How much risk is she taking on to grow the cash values in the policy?
So passive income. Now.
You may be familiar with the word retirement. I'm working really hard to erase that word from my vocabulary because retail retired from what? And just for trivia, me and my wife one day we opened up Google and I'm going to be right in front of everybody, we opened Google Maps and he put the word retirement. And guess what happened on Google Maps? Nothing showed up. Because retirement is not a destination, it's a mindset. Retire from what? I'm not looking to retire, but if you know. So I've replaced that word with passive income. And I'm going to add one more thing. It's not just passive income. Let's talk about passive tax free income. You deserve tax free, not taxable. So let's talk about this particular individual. So myra, she's age 50 and again she went through this whole process but her goal was very unique. And these policies are designed to meet a very specific objective. Her objective was to create guaranteed tax free passive income. And policies can be structured to do that. Now Myra was already setting aside, so this was her objective. She wanted $45,000 net annual retirement income from age 65 till age 90, 65 being stereotypical retirement age. Now Myra was only setting aside 50k per year into some other investments so that she can use those investments for the purpose of retirement. And we know and you know, that market is like a roller coaster. And Myra was done taking the roller coaster to achieve retirement because retirement was a certainty from her. It was going to happen. There's going to be time in future where we just won't have the energy to do what we can do today. We have to rely on passive income at that time. So Myra was done with the roller coaster. She wanted to change it. She wanted to go up in life using an elevator versus the roller coaster. So when she got introduced to the process of becoming a banker and she understood the attributes of the participating whole life policy and the contractual guarantees which grow every single day irrespective of what happens in the financial entertainment world. She wanted to do this to secure her passive income and she wanted to put 50k per year into a participating whole life policy. And we're just showing her like, hey, you can put 50k for 10 years, you can put beyond 10 years. But she wants to dedicate 50k per year to 10 years. So total in is $500,000, which is simple math. $50,000 multiplied by 10. So she would put in $500,000 of premium deposits into her policy over time of 10 years. And from age 65 till age 90, she can access tax free 45,008, 17 from the policy via a loan. When she gets to retirement age, she accesses loan, her cash values grow, she accesses more loan, her cash value is growing. Imagine a retirement plan which keeps growing as you keep accessing money. How cool is that? Retirement plan.
The total out. So from age 65 to age 90, she's able to access 45,008, 17 per year. Tax free. Tax free. So if she has other sources of pension income or passive income at that time, this access of money is tax free, is not going to change her tax bracket. Nobody even knows that she's accessing money as a loan. So. So if she's got rental passive income at that time, cpp, oas, pension from work, all that is taxable and all that combined will change her tax bracket. Accessing money as a loan against the policy will not impact your tax bracket at retirement. So total out is $1.1 million. So she puts in 500,000. She's able to spend $1,010,000 while she is alive. She's able to spend a lot more than what she put into the policy while she was alive. And we're assuming that occurs at age 91, which is beyond projected mortality for her. She is going to leave behind $1,080,000 to her beneficiaries tax free, which is way more than what she put into policy while she was alive. She puts in 500k, is able to spend 1.1 million while she is alive. And when she's gone, she leaves behind 1,080,000. So either way she wins, she spends more money while she's alive. She leaves behind a a boatload of tax free legacy when she's gone. So ask yourself this question. Was it easier for her to save $500,000 in a policy to achieve the outcome as you see on your screen? Was it easy for her to accumulate $1.1 million in a mutual fund or stock market or in an rsp? Which one's easier? See, when you compare things, it's obvious which one is better. But comparing is how we make that decision. How much risk is she taking on to grow the cash values in the policy? The answer is zero. The risk is with the insurance company to fulfill the contractual guarantee. The only thing she has to commit to, which is her behavior. Not insurance company's behavior is the premium. Because she controls that, insurance company cannot dictate how much money you need to put into policy. You decide that.
