Tax Free Retirement Income In Canada

And you're paying no tax on the death benefit proceeds. So the only loser in this scenario is the very same government that's printing money like crazy and spending like a drunken sailor and knowing full well that the bill is going to be paid from taxes and wherever wealth resides, somebody's going to try and steal it. And so if you've got large balances that are piling up in registered retirement savings plans or or registered retirement income funds, then you are on the government's radar. You've got a problem. So who are you doing all the work for? Who are you building up your retirement savings for? Who are you building your business for? Who are you building your estate for? I haven't looked at a single will yet that included Revenue Canada as a named beneficiary.

One of the statements that our late mentor, the late R. Nelson Nash, he used to often say that if you don't understand the problem, then the solution just won't matter to you. And so what we want to do is take a little bit of time just to frame up the problem. We'll do a review of everything that we're going to be covering. But without an understanding of the problem, then the solution that we're describing just simply won't matter to you either. Now we're going to be talking about constructing a tax free retirement income source. How to enjoy a lifetime of cash confidence financial growth, safe predictable lifetime access to cash, facing that future of yours with total cash confidence, protecting large retirement account balances from being decimated from future tax hikes, understanding why having retirement savings simply isn't enough, and uncovering why dividend paying participating whole life insurance is a big missing piece in your retirement tax and estate planning. Now by the end of this webinar you're going to have clarity on the problem, the solution and what you can do. You'll feel like an attendee from actually a presentation that I did to a number of clients in one of one of Canada's largest accounting firms. And this person sent me a message saying I can see how retirement and tax planning with dividend paying life insurance provides me with stress free certainty and powerful benefits during my lifetime and beyond. So you're going to experience that very same feeling by the end of this webinar. And what is the opposite of stress free?

I don't know if any of you.

Have ever experienced that before, but I have. I want to share with you that for myself personally I discovered my own path to a stress free, a very peaceful, stress free financial existence. The hard way I was born and raised in Timmins, Ontario, a small mining and forestry community. And I relocated to Western Canada in my early 20s. And unfortunately, both my parents passed away suddenly and unexpectedly. And neither one of my parents had proper planning in place. And my sister and I were left with a mess that we had to work through and to deal with. And I wanted to ask all of you if you've experienced an event where you've lost a loved one and you've had to deal with estate issues, tax issues.

Really, at a time, of course, when you should be taking the time to grieve and. And to mourn the loss of that person that you loved and cared about. And I'd like you to think about this for a moment. How many of you know someone who would die for you? And how many of you know someone that you would die for? And I want you to think about this for a moment. You're all going to die.

We're all going to pass away. We just don't know what your best before date is. But what we do know is that we've never met a single client who's had to face the death of a loved one who said, you know what, Bob passed away at exactly the right time.

And when we're done, tonight's webinar with the information that you will have in your possession, the knowledge that you will receive, our hope is that it's going to compel you to do something different than you may have been doing in preparation for retirement and in preparation for your eventual passing. One of our mentors, the late Bob Shiels, was such a powerful statement that he made. He said, I wish everyone could die for a week, just once, and see the problems that are left behind for the loved ones who care for them and who miss them so much. So we're going to give you some very specific, very specific information and knowledge. And now, while we don't expect that everyone is going to take action, if you do decide to take action with the information that we present to you, it may not be with us. And so we'll just give you some specific recommendations on what we would want you to be on the lookout for. If you decide to take that step forward and incorporate this into your life, it's just going to be an amazing evening. And what I will tell you is what we believe and what we believe is that financial control should be in your hands. And I'm speaking directly to you. Financial control should not be in the hands of the banks. It should not be in the hands of the government, it should not be in the hands of any volatile or temperamental stock market. It should. You should be in a position of total and absolute control. And so we're going to show you exactly how to be put in a position of total and absolute control. Now, why am I talking about life insurance? It really, truly is the most underutilized strategy and tool to finance the things that you need throughout your lifetime to protect large retirement balances and business exits from being decimated at the highest levels of taxation. Now, I do want to share with you that many people believe and think that having retirement savings is enough, and it's simply not. What matters is what you keep after taxes. Now, what I'd like to ask all of you is based on everything that's going on in our country right now, and the central bank printing money and the government monetizing that debt, you can already see what's happening with inflation, and you can already see what's happening when we have too much money chasing too few goods and services. All of this money that's being printed, who do you think is going to pay the bill? Is it going to be you? The taxpayer? If you answered yes, you're absolutely correct. Now, I'd like to know, do you believe that there are potential tax hikes on the horizon? Where's the money going to come from to pay the bill? It's going to come from taxable income and taxes in general. When you take a look at how you are structured right now and what you're doing to plan for your retirement, if you have and are accumulating a lot of money inside of taxable accounts, you've got a big problem and so do your beneficiaries. And so we're going to address that. Now, here's a fundamental truth. Your money must reside somewhere. And now we know that there's a wide variety of financial instruments available to you. You've got things like mutual funds, stocks, real estate, cryptocurrency, gold, silver, insurance, savings, so many financial instruments products that are available to you. And each of those products has its own set of characteristics that are really important to evaluate. Characteristics like volatility, tax consequences, control.

Risk.

Access, liquidity, and so on. And so we're not here tonight to talk about any financial product being good or bad. It's just important to recognize that every financial product just is. And you've got to do what's best for you, for your family. If you're a business owner, you've got to do what's best for your company. And for your employees and by proxy for your family. So just make sure that you're carefully evaluating those characteristics so that you can de risk your retirement so that you can create cash flow confidence, so that you're not going into that phase of your life stressed. You're going into that phase of your life relaxed and confident.

I know what side of the fence I want to be on and it's certainly not the stressed outside. Now, if I'm going to invite you to participate with me tonight, let's get started. I want to go through a fun thought experiment with everybody. Now, if you could invent a type of asset from scratch and that asset had absolutely no drawbacks whatsoever, what attributes would that asset have? What would it look like? And we asked this question to get us thinking. And so let me give you a few thought starters. Some of the most frequent responses that we get include high rate of return no taxes, safe. Now let's see from over the years that we've been asking this particular question and inviting people to go through this thought experiment. What are the most frequent responses that we received? Let's see if any of these resonate with what we've already heard and with what you may be thinking.

Here are the most frequent responses that we received. High rate of return Consistent rate of return Conservative liquid guaranteed tax benefits meaning tax free no market volatility. It yields income besides capital gains Creditor protected inflation protected Control transferable Easy to manage no hidden fees or penalties Reputable and private. Now what I'd like you to do is I'd like you to take a look at your own various assets and simply identify which of the features from this list that your assets do well on and which of the features they fail to satisfy. I've got a surprise for everybody.

That list of attributes most accurately describes dividend paying participating whole life insurance.

Did that surprise you? I know it surprises most people when they see that for the very first time. We're going to talk about the tool. Now, the tool to create your insured retirement program is participating dividend paying whole life. Now this tool, I'm going to break it down in the most simplistic way that I can for you. The tool itself is a unilateral binding contract. The participating element is that you become a co owner of the life insurance company and you participate in the profits generated from every line of business that the insurance company operates in. In addition to that, dividend paying means that every year that the life insurance company declares a dividend, it is contractually guaranteed to be Paid and it cannot be repossessed and can never lose value. Now, the carriers that we work with here in Canada have been declaring and paying dividends every single year without interruption since the inception of their issuing of dividend paying, participating whole life insurance contracts. That track record extends to the past 176 years. Now think back to everything you can recollect has happened in the economy and in our country the past 176 years. We've got the Spanish flu, the Great Depression.

27 recessions, the financial crisis of 0809, the tech bubble bursting in the year 2000, Covid 19H1N1SARS, to name a few. And yet these life insurance companies have remained the most financially solvent institutions on the planet. If you think back to the financial crisis that happened in 0809, hundreds of banks failed across the United States and others across the world. Not one life insurance company failed during that crisis. What does that tell you? They're the most financially solvent institutions on the planet. The reason is that commercial banks can inflate the money supply. And in fact, they do that every time they issue a loan. They're simply lending money into existence that never existed before. The insurance companies themselves cannot inflate their money supply. They do not participate in the fractional reserve banking system. So this tool is not a creature of Wall Street, Bay street, or the tax code. This tool has been in existence longer than any of those other institutions. Very important to understand the history there because it's very important to remind yourself that your money must reside somewhere. Whole life, meaning that you're insured for your whole Life to age 100. There's a growing pool of financial value that begins accumulating in the policy from day one. That pool of financial value is named cash value. It continues growing on a daily basis, and it is contractually guaranteed to match the total death benefit of the insurance contract, your death benefit by age 100. So every single day that you're aging closer to 100, your pool of financial value is growing. There's no pandemic, there's no recession, there's no real estate cycle. There's no government intervention. There's no stock market volatility that can take away any of that accumulating value. The reason is that the insurance company is legally bound to fulfill that contractual guarantee. So you're not the one who is subjecting money to the risk of loss. You're not the one who's making financial decisions or investment decisions based on colorfully named mutual funds or other types of investments that you can expose your capital to. The insurance company controls the investment function of the insurance company and is contractually guaranteeing an outcome for you as the participating policy owner. Isn't that good. And you're paying no tax on the daily accrual of that growing pool of financial value. And you're paying no tax on the death benefit proceeds. So the only loser in this scenario is the very same government that's printing money like crazy and spending like a drunken sailor and knowing full well that the bill is going to be paid from taxes. And wherever wealth resides, somebody's going to try and steal it. And so if you've got large balances that are piling up in registered retirement savings plans or registered retirement income funds, then you, you are on the government's radar. You've got a problem. So we're going to solve that problem. Now we don't have. It may come as no surprise to everybody, but we don't have financial guarantees.

Not very many anyway that exist in life anymore. Pensions are practically gone by the wayside. There's doubt about the future. However, this particular tool, a dividend paying participating whole life insurance contract, can help create that peaceful, stress free financial existence. A very, very stable peace of mind and unmatched financial security. Here's how the cash value begins accumulating immediately. It's contractually guaranteed to grow on a daily basis and it cannot go down. Easy access. If you have a growing pool of financial value, opportunities will track you down. And you will have easy access to to be able to take advantage of those opportunities that track you down. And I've got a bit of a news flash for you. You don't have to wait until retirement. Think about where your money resides. Now that you're planning to use in retirement. You've trapped it in a vise. The only way that you can get access to it is to pay a toll, and that's called taxes. The only way you can get access to it is to reduce the account value. When you have dividend paying participating whole life insurance, you can borrow against your accumulating value without withdrawing anything from the policy, without triggering a taxable event, and without ever having to worry about waking up one morning wondering where the heck it is. All the money that you've worked your butt off for, where it's all gone because of some stock market crash that occurred just at the right time for everyone but you.

You've also got access to this growing pool of financial value without penalty. And there are several tax advantages that we'll talk about tonight both personally and corporately. Now you get a growing death benefit. And I can tell you from again from firsthand experience in what we do. We've been called upon on a number of occasions to deliver death benefit to grieving family and not one grieving family member has ever said to us that they wished the check we showed up with was for less money.

And when the grieving family is also reminded that the proceeds are liquid, available immediately and income tax free.

The sigh of relief is really quite remarkable because my definition of the best investment is the one that returns the most when it's needed the most. What I experienced personally with both my parents passing away suddenly and unexpectedly and neither one of them being life insured with the exception of a small group insurance benefit that my late mom had.

We certainly could have utilized tax free money when it was needed the most. And so I want you to take a moment and just think about the ones that you love, that you care about that would miss you if you passed away suddenly and unexpectedly. How are they going to go on living if they have to liquidate assets to do that? Are they going to pay a tax? Are they going to pay a toll to get access to those assets? Now let's talk about what matters most is what you keep after taxes. You've got two major problems. The first one is the problems that can affect you during your lifetime. And the second is the problems that can affect everyone that you leave behind after your death. And if you've got taxable savings and investments, whether it's personally owned or corporately owned, you've got a problem and so do your beneficiaries. Now here are some of the problems that can affect you during your lifetime. The first is unforeseen events nobody could have foreseen. COVID 19 tax risk. Changes that occurred in the federal budget in 2018 that have a particular impact on corporate business owners and households and what potential tax hikes may be on the horizon. Tax postponement. Deferring the calculation of tax to some point in the future when you have no idea what that tax calculation is going to be. Market risk. Your investments are at risk of being lost to stock market manipulation or a market crash at the wrong time for you. Investment risk. This involves handing control of your money over to someone else who thinks that they can do better with it than you can.

Of all the people that I've talked to over the past 14 years, whenever there was an instance where money was lost and it involved investing.

Every instance involved handing control of your money over to someone else who thought that they could do better with it than you can. That person may have had the experience, you had all the money. And the roles were reversed by the end of the ordeal where you ended up with all the experience and someone else ended up with all your money lost. Opportunity cost. This involves a constant transfer of capital away from your home, away from your family, away from your business. And we have to reckon with that. I want you to think for a moment of all the money that you've spent on anything up to this point in your lifetime. Just take a moment and think through all of the money that you've spent for everything that you've needed up to this point in your lifetime. Can you write me a check for that amount of money today?

The obvious answer is no. And the reason it's no is because you did all the work and everyone else got all your money. You used the credit card, you used the debit card, you paid the loans, you paid the car loans, the mortgages, etc. And every time you made a payment, every time you socked away money in someone else's bank, you created cash flow confidence for that bank and all of your debt is someone else's passive income. Now let's talk about the problems that can affect your beneficiaries after your death. The first is taxes. Now in Canada we have what's called a deemed disposition rule. And what that means is that when you die, you are deemed to have disposed of or sold all of your capital property at the moment of your death. That includes the cottage on the lake. That includes your registered, non registered accounts. That includes your stocks, your coin collection, your jewelry, your art collection, all of your capital property is deemed to have been sold at fair market value at the moment of your death.

Now, although the sale of that capital property didn't actually occur for the purposes of filing what's called a terminal tax return, your final tax return, you only have a limited window of time. Your executor, whomever is handling your final affairs, only has a limited window of time to value everything in the in your estate, all your capital property, and take that into account when filing your terminal tax return. Now, let me give you a very, very simple, simple example. You've got a stock portfolio that was worth at fair market value $1 million at the time of your death. It takes your executor five months to complete your estate, you know, file your terminal tax return. And at the time that the taxes are due to, the stock market has declined and the Account value has dropped to 700,000. Guess what amount you're deemed to be paying taxes on? The 700,000 or the million?

If you guessed a million, you're correct. And I'll tell you something. Revenue Canada does not accept any substitute for money. And so in order to make that account value become money, you've got to liquidate it. And so ask yourself this question. How much of my estate value is liquid without. Without triggering tax and without depreciating the value of the assets in my estate? The deemed disposition rule is going to be dealt with and reckoned with from all of you. At some point, you're all going to die. And so what planning have you done to deal with that deemed disposition? It'll be much more after this evening, I can promise you. Your family inheriting mostly taxable funds. That's the worst thing to inherit. The worst thing to inherit is a taxable account. I want you to think about this for a moment. You've got a registered retirement income account balance, a rif, and you pass away. And that RIF balance is a million. It transfers to your spouse. So it's called a spousal rollover. A common misunderstanding that spouses have is they believe that that transfer is tax free, it's only tax deferred. Now, God forbid, the unthinkable happens to the surviving spouse, and the surviving spouse has enjoyed the use of the money in that account. And at the time of the surviving spouse's death, the account value is 600,000. That entire 600,000 is added to that last surviving spouse's terminal tax return as income. The entire balance is added to the final tax return as income. Now, you can imagine that's going to trigger a significant taxable event. And I can't tell you how many times I've been contacted from chartered accountants, from estate planning attorneys who are dealing with grieving families, dealing with distribution concerns of the estate. And they need to be resuscitated because they have literally collapsed when the accountant sat down and said, no, 600,000 is not what's coming back to the family. And we understand that's what your mom wanted to leave behind, but we're going to have to send a check for 300,000 of that to Revenue Canada. So who are you doing all the work for? Who are you building up your retirement savings for? Who are you building your business for? Who are you building your estate for? I haven't looked at a single will yet that included Revenue Canada as a named beneficiary or leaving or bequeathing anything to Revenue Canada in that will.

But I'm here to tell you that you may be already set up to do that, even if it's unintentional. So we need to solve that problem. The double tax trap. This impacts business owners. When you die, remember you're deemed to have disposed of all of your capital property, including the shares that you own in your business, and that is going to form a part of your estate. Taxable event may be triggered as a result of that. And then when you're surviving, heirs need to get access to that stock value, there's going to be a taxable event yet again in the form of taxable dividends paid out to surviving shareholders or to the heirs. And we can solve that problem immediately by getting that life insurance policy in place to make sure that it has at minimum the death benefit necessary to address that event and to prevent a tax double tax trap. Liquidity. Again, I asked this question. How much of your estate can be turned into cash quickly without triggering tax or losing property value? RSPs, RIFs, mutual funds are the last accounts that you want to be tapping into to pay your terminal tax obligations or other final expenses. Now you may have caused the problem, especially if you've been doing everything right.

Here are some silent retirement killers that may not cross your mind very often. The first one is risk. The second one is tax. And both of those risks can be addressed by solving the problem.

Revenue Canada's got a first mortgage on your retirement savings and you're forced to pay taxes on their schedule, not yours. So who's in a position of control and whomever has the gold makes the rules.

Now not understanding that tax deferred does not mean tax free is a big problem. You're going to owe income tax when you begin to withdraw and you do not know what the tax calculation will be when you need the money. If you're working with a financial planner, if you're working with a broker, I want you to call and ask them tomorrow, what is the tax calculation going to be? What are the tax rates going to be when I need the money the most? Nobody knows the answer. So we have to rely upon logic. And logic tells us that someone's going to have to pay the bill that's being created right now and that is going to be paid through the collection of taxes. Now your family will most likely also have a liquidity problem if retirement funds and other assets have to be cashed in quickly in order to raise money after your death for taxes and other post death expenses. Now the solution is dividend paying, participating whole life insurance. And the benefits of this tool are not often maximized in planning. That's why we get contacted all the time. As a chartered life underwriter, we're contacted regularly by CPAs, by estate planning attorneys to talk about how to address this in a planning process to make sure that we get everything covered. The perfect tool for a lifetime cash flow management system, guaranteed retirement income security and estate protection. Now you may be asking the question, okay, well, when I think about life insurance, I often think that I have to die in order to win. So what's in it for me while I'm alive? Well, we've got guaranteed daily cash value growth that we've talked about earlier. It's free of annual accrual taxation, it can never lose value. And we've got dividends that we receive every year that the life insurance company declares them. And they do not trigger a taxable event. They can never be repossessed. So you can essentially earn investment grade returns without triggering investment tax. Isn't that good?

You bypass the banks, finance companies altogether while you're alive. You've got ready access to capital without lengthy nosy credit checks, without personal guarantees, without having to submit financial statements without needing the approval of some loan manager. You can add equipment, technology, resources to your business and put yourself ahead of your competition. You've got more cash flow coming in rather than more cash flow going out. In addition to that, you minimize corporate tax during a lifetime of asset accumulation. If you do think to yourself that you feel like you're not being taxed enough, and I'm saying this in all.

Professional courtesy, you can write a check to Revenue Canada that they're not expecting, honest to goodness, you can send extra money to the government if that's your prerogative, if that's what you want to do. But we prefer to work with folks who understand that tax is necessary. Right. We have to support infrastructure, frontline healthcare, critical services, fire, police.

You name it. However, if we can de risk and we can also minimize tax, we actually have an obligation to do that. And we have an obligation to whom? To ourselves, to our family, to our employees, to our fellow shareholders inside of our business, etc. Make sure that whatever it is that you do, you're not doing to create unnecessary and erroneous taxation. It just makes no sense. You can reduce risk further by moving capital from accounts that are forever taxed to accounts that are never taxed. Dividend paying life insurance is the best provision in the tax code to do that there is no greater exemption that exists in the tax code today. And if you're a business owner and you've heard the words passive investment income tax, then you're likely not sleeping very well at night. And we can address that through the use of this tool as well. And get a better night's rest. Knowing that your savings are no longer subject to those risks, you can bolster your balance sheet. Haven't met a business owner yet who thinks that bolstering their balance sheet is a dumb idea. You can grow your retirement savings safely and securely with no government intervention or penalties on when or how much income you take. Keep more money in the company and by proxy in your household. By recapturing those business and personal overhead expenses, you remove the risk. The policy contract has specific guarantees and certainty. Now, what's in it for your family when you die and that day will come, you will die.

Your family will have guaranteed access to a lot of tax free cash outside the scope of your estate. The stock market, etc. Offers no such guarantees. The capital dividend account that we're going to dive into in a little bit, this is for corporate owned. The capital dividend account is going to get you very, very excited about just all the advantages that this represents. When when you pass away, take care of all your final tax liabilities from money from the insurance company. We often say let the insurance company proceeds pay the bill. So let's get the bills paid for your estate rather than buy your estate. The life insurance way is always cheaper. In addition to that, you can bring the entire amount of money paid into the policy plus more back to your family and share none of the gains with Revenue Canada. You avoid the double tax trap. The downside is that you have if you have little to no estate tax obligations, your family simply inherits more tax free money.

And you get to bypass probate and you get to bypass the estate. The money can go directly to your named beneficiaries when it's needed the most. You can also utilize this tool to provide tax free money for beneficiaries so they don't have to withdraw amounts in excess of the minimum required on inherited registered retirement income funds. They can stick with the minimum withdrawal level and they can minimize income tax because remember, the money coming out of the RIF is taxed. The money coming from death benefit proceeds is tax free.

Isn't that good? You can also utilize it to improve or expand your wealth without triggering tax and ensure that your family ends up with your entire net worth. In other words, you can turn what was a taxable estate into a much larger tax free estate. Now, we all know that money solves a lot of problems, a lot of problems. What we want is we want more tax free capital to solve those problems. Now, one of the most common questions that I get is, Jason, can you connect me with someone on your team, the right person to take a look at my financial situation and show me how to create my own insured retirement solution? The answer to that question is yes, we have an insured retirement solution call that's designed just for that purpose. To schedule that call, simply click the link that you've received or text the word schedule to 780-809-4599. Again, that's 780-809-4599. Just text the word schedule and create a time. The initial call, I believe, is 15 minutes. It's just an initial call to get acquainted, to see if we can add value to your existing, you know, planning. And if we can, we'll put you in touch with the right advisor on our team to help you construct your own insured retirement solution. And I can tell you that through our process, there's no, nobody's going to back you into a corner or try to twist your arm or try to compel you or persuade you to do anything. We are the buyers in this process, not the sellers. And when you think of a transaction where there's a buyer and seller involved, the buyer is the party that gets to do the rejecting. And so there has to be a good fit there. If you feel like we're a good fit for you, we have to feel like you're a good fit for us before we decide to do anything at all. And there certainly won't be any pressure. And if you come through our process and you determine that this is something that you want to do, then you'll be off to the races and we'll help you get that engineered outcome that you're looking for. But if you come through our process and you decide that this isn't something that you want to do, as long as you leave happy, that's okay too. Now what I'd like to do is I'd like to invite.

My colleague, my teammate, Sarblogh Gill, and if everyone's ready, we're going to dive into a real example. And the first example that we're going to dive into is going to be a personally owned life insurance policy. And we're going to contrast that with to investing capital in an instrument like an RSP that's invested in mutual funds. And then immediately following that, we're going to dive into the corporate owned example. So these two examples are key to your gaining an even deeper understanding of what we're talking about here this evening.

The topic for today's theme is passive income. So I want to talk about passive income, but this policy that I'm going to review with everybody is personally owned. So let's meet Nathan. Now, Nathan, he's age 48 and he's an engineer. And when Nathan met with us and he had a clear objective in mind. So when we meet with folks to understand how we can add value, as Jason mentioned, we are the buyer in the relationship. So we want to make sure that we commit because we are committing to a promise that we want to deliver. We really go through the goals. We want to understand how you structure today from income, assets, liabilities and what goals you have. And then take the time to see how, how we can help you achieve those goals through the use of participating, dividend paying, color policy. So he had a clear goal. The goal was to achieve cash flow confidence at retirement. And he selected age 65. It's his age. He wanted to go with stereotypical retirement age. So that was his goal. So working backwards from his goal, we said, okay, Nathan, how much are you setting aside? What are you doing presently to make sure that you're able to achieve your cash flow confidence? And he said, you know what, I'm putting money into RSPs and I have.

A financial planner that I work with and he is guaranteeing me 8% per year on my investment that I'm ready to put in $30,000 per year into RRSP. Because people look at registered retirement savings plan, they look at retirement, they look at savings, and it's a plan. So immediately maybe the mind says, well, this is a good place to warehouse money when it comes to retirement. So he met with the financial planner and he wants to achieve his goal through rsp, which is the most conventional way. And the financial planner said, I'm going to work really hard for you, Nathan, and I'm going to make sure that you get 8% per year on your money as an RRSP. Now to do that. So for someone to deliver that level of service of making sure that Nathan gets 8% per year, they have to get paid for that service. And the way most advisors get paid out there, especially people dealing with the investments and mutual funds and things like that, it's mostly through management expense ratios. So when they're promising Nathan 8%, they're going to take 2% to cover their cost of providing that 8% to Nathan. In reality, Nathan is not going to be making 8%. He's going to be making 6% in his RRSP every single year. So let's see if Nathan takes the conventional route to achieve his financial goal, which is to have cash flow confidence at age 65. Let's see how this RRSP does for him. Assuming that he's going to get 8% per year till 865 and beyond now, 8% effective rate of return every year. Now, I'm not going to get into discussion whether, you know, that's, that's a low rate, it's a higher rate. You know, some people may say that, hey, you know what, I can get 15%. Some people may say 8% is, is, is pretty risky. Well, I'm just going to say it's doesn't matter where you invest money. Like Jason mentioned, it is quite volatile. There's risk associated with it. So keeping all these arguments aside, whether 8% is good or bad, it's high or low, let's just assume that Nathan is actually able to get 8% per year in his RSP and let's see what the outcome is going to be. So we are going to be his Santa Claus and we're going to promise him 8% per year. So for clarity, he's aiming for 8% per year. After management expense ratios, he's going to get 6% on his investments. So $30,000 per year. And he started investing into RSP at age 48, and then at age 60, he's going to stop investing money. So from age 48 to age 60, that's about 12 years. He would have put $360,000 into the RRSP and let's see what the outcome is. But just before we get into seeing what the values are going to be at age 65, because he wants to start withdrawing income at age 65. Think about this. Something to think about. If he graduates now, I don't like the word debt. I'm replacing it by graduate. So I hope that's okay with everybody. So if he puts in $30,000 into the RSP today and he graduates, meaning he dies, he's not on planet Earth anymore. How much death benefit does the family receive from the rrsp? Well, if you're thinking it's going to be the value of the account, you're absolutely right. It's the value of account minus the taxes that he'll have to pay or the family has to pay to get the money out of rrsp. So if all he has is this and death occurs, family only gets the value of the account. So something to consider or something to keep in mind. Now in this particular example, so going back to his case study, so retirement income using registered retirement savings plan. So from age 65 to age 90 and I'm going to kill him at age 90 which is five years past a projected mortality for male non smoker which is 26 years of him enjoying his retirement. So he will be able to get $52,000 per year gross out of RRSP every year. Now I'm using the word gross because he has to pay tax on that money in future. Now assuming the tax rates don't change after taxes, approximately his spendable money in the RRSP is 36,400 per year. So $52,000 is before taxes, $36,400 per year is net after taxes. So Basically from age 65 to age 90 during his retirement time he was able to spend $946,000 from his RRSP.

Now just to summarize, total investment is $360,000. Total net cash flow at passive income after paying taxes is $946,000, which is pretty good. So he did good. His financial planner did a pretty good bang on job. Now let's reanalyze this again from and different vantage point. Now some points to consider. Now think about this. Now did Nathan take on a lot of risk to achieve his goal in terms of subjecting his money to the risk of loss based on what the stock market is going to do? The answer is yes. And if the stock market goes down, his outcome is going to change. And hey, if the stock market does good, his outcome may get better. Now will his taxable withdrawals from RRSP every year impact the taxes on other taxable incomes at that time? So at retirement at age 65, if he is taking money out of RSP and in addition to that he has CPP income, he's got rental income overall, it may put him in a different, different tax bracket. And overall taxes may be more than what he just paid on rsp. And that may also result in OAS clawback because RRSP income, you have to report it. Now God forbid something was to happen to Nathan. Let's just say he, he got on the wrong bus and he got hit and he's no more with us. How much will his family receive tax free? Well, if all his money is in the RSP and he dies and he's no more with us. Well, his family will receive zero tax free. It's just in case he has a spouse at that time. Whatever money he has in RSP is going to be rolled over to the spouse, tax deferred. It's not tax free. The spouse as the spouse gets to withdraw that money going forward, the tax has to be paid. So nothing is going to be tax free. The tax has to be paid. But in case him and his wife both pass away at the same time, then the estate of Nathan or his kids will receive all that money after paying tax has to be paid on that money before the kids can start using the money. So there is no escaping taxes in that scenario. Tax has to be paid either by him or while he's alive, as he's taking the money out or in case something happens to him, his wife receives the money, wife takes the money out, she has to pay taxes or everything is going to be deemed to be disposed at second debt. Now what if his financial planner misses one year to achieve 8% per year? What if the market goes down? Is that going to impact his retirement goal? Absolutely, yes. Because this investment is volatile. It's subjective to what happens in market. Now what if the management expense ratio changes? What if the management expense ratios go up? Is that going to impact his retirement? Absolutely, yes. Now what if the future tax rule change? How will that impact his retirement? So all these factors have to be considered when you're making a decision where you need to put your money in to achieve that cash flow confidence at retirement. Now you work hard every day and at some point in future you may not have the energy to continue working. And at that point you want cash flow confidence. So your retirement lifestyle should not be, it's a non negotiable. You want money to be there when you want it to be there. Like Jason mentioned, the best investment is the investment that shows up when you need the money the most.

And what's the alternate? So let's look at an alternate using a better way. And the better way is low risk using a participating dividend paying whole life policy. And as Jason mentioned, the policy is a unilaterally binding contract with very specific contractual guarantees. One of which is by age 100, his cash values and his death benefit must match. So it doesn't matter what happens on stock market, Bay Street, Wall street, his cash values keep going up every single day because of those contractual guarantees. All the risk to fulfill those contractual guarantees is with the insurance company, not with Nathan. So let's look at the same Scenario where now we're looking at achieving his outcome using an insured retirement program which is using a participating whole life policy. So Instead of putting $30,000 per year into RRSP, now he's putting $30,000 per year Into a participating whole life policy as a premium. And he puts money in over the same time period, 12 years. So from age 48 till age 60, he puts $30,000 per year. So total in for him same as RSP is $360,000. Now since it is life insurance, immediately he has a starting death benefit of $541,000. So God forbid something was to happen to Nathan, he puts in $30,000, his family receives 50, $541,000 tax free money. The family is going to be okay. Whereas with the RSP if you put $30,000 and the only thing the family is going to receive is the value of the account. So again, your money must sit somewhere. By putting your money in a policy, you're not going to be just achieving your financial outcome in this case, which is retirement, but you're also going to be protecting your family. Because 10 years from today there's only two possibilities.

Either you're alive or you're gone. If you're gone, the family is going to be okay because of all that tax free money that shows up. And if you're alive, you're going to be doing just fine because you'll be able to spend all the money while you're alive from the policy. We're going to see that in a bit for Nathan.

So passive cash flow. So starting at age 65 all the way to age 90 using a participating whole life policy, he's able to get 38,406 every year from using the policy. Now from age 65 to age 90, $38,406 per year. That's $998,556 that he's able to spend while he's alive. And I'm going to kill him at age 90 again. And his death benefit at age 90 is going to be $419,866. So he's able to spend more money while he's alive from the policy. And when he's gone, his family gets a lot more death benefit than what he put into policy as a premium. So either ways he's going to be just fine. So everything that we do in the life, everything that we do in life is, everything that we do in life financially is a measure against what everybody else, everyone else is doing financially. So let's compare, let's compare both scenarios side by side and see which one makes the most sense to achieve his financial goal. So some points to consider now, whether it's policy, whether it's RSP earning him 8% per year, his objective was met in both scenarios. Now second point is who has taken all the risk through the policy? It was insurance company who had all the risk and fulfilling all the contractual guarantees. There was no risk to Nathan or as to rsp. The risk was to Nathan to make a decision on where he needs to invest with the help of his financial planner. The money that he put into the RSP, into the policy, the same amount of money, $30,000 every year for 12 years. The money that he was able to use while he's alive using the policy is 988,556 from age 65 all the way to age 90. Whereas from RSP is $946,000 and RSP is earning 8%. So at 8% that's a pretty good investment. And policy beat the pants of that investment to provide him the living benefit. Now if he dies at age 90 again just assuming that that's when he dies, the family gets $419,000 866 tax free money. Whereas if he had that money in RRSP and death occurred, family would have received zero money because he would spend all the money while he was alive.

Did he spend more money than what he put in while he was alive? The answer is yes. Through the policy he spent 988,556 while he's alive. And the money that he put into the policy is $360,000. Even with the RSP, yes, he was able to spend more money while he was alive. So he put in $360,000, $360,000 and he spent $946,000. But he was able to spend a little bit more from the policy. Now did he leave behind more than what he put in when he's gone? The answer is yes. He left behind $419,000 in tax free death benefit, which is more than what he put in as premium. Whereas with the RRSP when debt accurate, he left nothing behind. Now how much tax he paid on retirement. So as he was accessing money via how we're going to structure these policies, the money comes from these policies tax free and we'll show you how there's no taxes that we pay.

And through rsp he paid a lot of taxes while taking those money. Out of the RSP account. Now the level of risk.

Doing it through the policy is a low risk because all the risk is with the insurance company to fulfill all the contractual guarantees. Whereas the level of risk with the RSP is pretty high because that is subjected to what's going to happen on stock market.

Now, will his taxable income increase if he has other sources of passive income during retirement states like CPP or rental income? Well, no, because when we access that money from a policy is accessed as a loan and loans is not income. So there is no tax that is going to be triggered and hence loan is not income is not reported to cra. So if he's got other sources of revenues at that time, like rental income, cpp, things like that overall tax bracket is not going to change just because of he's able to access money as a loan against his policy. Whereas with RSP as he's withdrawing his income and he's got CPP income and rental income and maybe other sources of income that may put up in a high, that may put Nathan in a high tax bracket.

So in both scenarios he didn't change his cash flow, but he did work harder and took a lot of risk by doing it through the RSP versus with the policy.

When you know better, you'll do better. And one of the core values which is really near and dear to us is we come from a source of providing education on the process of becoming a banker and retirement strategies through the use of participating whole life policy. We educate. But ultimately it's your decision if you want to take this action or not.

Do you have an exit plan for your business? One day because of death, disability or retirement, you will exit your business. And according to the Wall Street Journal, this is a very interesting statistic that 39% of business owners have a succession plan and 55% die without a will. If you shop on Amazon like most people are doing Nowadays, they carry 41,406 book titles on how to start a business. Yet interestingly enough, There are only 405 titles on how to exit a business. And so finishing well is just as important as starting well. And one day, because of death, disability or retirement, you're going to exit your business. Do you have an exit plan? So why have most business owners not planned? They've reached a stage in their life where they've built considerable wealth, very profitable companies, but they've made no provision for the transfer of that wealth or the transition of the company. Nor have they made any plans for those who rely upon it the most. And why haven't they planned? Is it because they're unaware of the problem? Not a chance. Business owners have been there, done that, got the T shirt on advice and financial planning. They just haven't taken action. What you've done, you've made a great decision being here this evening because that's a step in taking action. Business owners make time for the things that they believe are important. So it's not that they were unaware of the problem, it's because they didn't do anything with the advice that they received. The answer is business owners make time for the things that they find important. And is it because they don't care? The answer is no. Nothing functions when an indispensable part of the business is not there. And that indispensable part of the business is you. The day you open your business, you should start your succession planning. Most businesses end up taking on a life of their own and the owner becomes totally consumed in the day to day running of the business. And when they wake up one day, they're facing a situation that they haven't planned for. They're 65. All of their money's tied up in their business. They have no succession plan. They have no way to get the money out of their business. So the question is, do you have an exit plan? Now I want you to meet John. John is a dentist. He's 45 years young. And John's objectives?

Certainty that if he died tomorrow, that all of his terminal tax and other financial obligations would be taken care of. He needs 1.2 million in order to achieve that objective without any burden to his family or to his business. He wants to be able to control the financing function for additional operatories, dental equipment and business expansion. He wants to supplement his household retirement income by 80,000 per year from age 60 all the way through to age 90. If death occurred at age 91, John wants every dollar that the corporation ever put into the policy to come back to his heirs income tax free. Now when John retires, he plans to convert his existing professional services corporation into a holding company and potentially acquire additional assets. He wants those assets to be accessible to his heirs in the most tax advantaged way. Now what John did is he allocated 30% of his annual corporate surplus capital. In this case it was 100,000. And he deposited that into a corporate owned policy over a 12 year period. So he deposited 1.199 million and $1. And that was from age 45 through age 57.

He plans to retire at age 60. Now John will have access to $81,188 every year from age 60 to age 90. We're going to kill him off at age 91. So that's a grand total of 2,516,828. So he put in $1,199,001. He's accessing 2,516,828 in retirement. If death occurred at age 91, the net death benefit is 1.251 million, which is more than everything the corporation paid into the policy. Objectives have been achieved. Now John's death will give rise to what's called the capital dividend account. In the business. That capital dividend account will receive a credit for 6,260,000, meaning that his heirs can extract assets from with a total value of 6.260 million in the form of tax free capital dividends. So I want to just take a moment and just zoom in a little bit on what's happened here. 1.199 million has gone into the policy. The corporation utilized a portion of its surplus capital, its retained earnings on an annual basis to fund the policy. The corporation owns the policy. The corporation is the premium payer. John is the life that is insured. There is no tax on the daily accrual of cash value. The death benefit proceeds are received by the corporation income tax free. The policy is exempt from the passive investment income tax rules. I say that again. The policy is exempt from the passive investment income tax rules. Now when John is ready to receive passive income in retirement, John is able to achieve his objective with certainty. He's not going to be laying awake at night wondering what's happening with Bitcoin, wondering what's happening with the stock market, Wondering what's happening with his real estate portfolio. He's not going to lay awake wondering what's happening in the economy or what the government's plans are to increase taxes. John is going to go into retirement with certainty. He's going to have that peaceful, stress free financial life in retirement and cash flow confidence. When he dies. The capital dividend account receives a credit. This is a notional account where the credit can be extracted from the corporation to the surviving shareholders or to the heirs. Surviving heirs on a tax free basis. Now who's paying the premium for the policy? Who's spending the money? Here are some highlights. Your money must reside somewhere. Your corporation's money must reside somewhere. Any financing debt that the corporation takes on becomes someone else's passive income without implementing the use of this tool, when you think of corporate retained earnings, ask yourself, who is actually retaining those earnings today? Is it your corporation or is it the bank where the corporation's money resides? Every deposit that you make into someone else's bank is creating cash flow confidence for the bank.

I want you to think about that for a moment. Isn't it true that at present, all of your income, all of your corporate dollars are flowing through the books of someone else's? It doesn't have to be that way. Someone and some organization must control the function of banking as it relates to your needs and your corporation's needs. Of all the advantages that we've described to you up to this point, the one that we haven't talked about is how to take control of the financing function as it relates to your needs personally and as it relates to the needs of your business. I'm going to talk about this financing function real quick for everybody's benefit. Let's presume, and I want you to think inside of your business, that this can be applied to anything. It doesn't need to be just business equipment. It can be additional human resources, it can be technology, it can be office space, whatever that may be. In this particular example, we're going to talk again about our dentist who needed a piece of equipment valued at $55,000. Now, his options to buy the equipment could have been to pay cash, finance it, or lease it. Each one of those three options would represent a permanent transfer of money away from the business and, by proxy, the business owner. The other option is by implementing the process of becoming your own banker, the infinite banking concept, the essence of which is to have that money flowing back to your household or business and to recapture the interest and the money that you would have otherwise paid to someone else to achieve the objective of buying the equipment. The lost opportunity cost alone of choosing one option over the other is staggering. If you think of paying cash, leasing, or financing, every one of those options involves transferring money away. And when you transfer that money away, you can never earn interest on it again. You can never spend it again. You can't access or use that money not only for the rest of your lifetime and your business's lifetime, but for every generation that comes after you. So when you think about financing something and you think about the interest that you're going to pay, I want you to think about, if you didn't finance it and you utilize someone else's system, how much interest you're giving up. The opportunity to earn. So many people have heard the term lost opportunity cost, but most people just pay lip service to it. They don't actually reckon with it. By implementing this process and using the tool, the dividend paying participating whole life contract, you're going to take control of this financing function as it relates to your needs. Now what I'd like you to do is that if you haven't already and you want to have a discussion about the insured retirement solution and how it applies to your specific circumstance, click the link that you've received or text the word schedule to 780-809-4599. That's 780-809-4599. All right, we talked about strategy which is turning taxable money into tax free money by using the tax exemption that's available for life insurance. And whenever tax rates increase, tax free becomes instantly, instantly more valuable. Participating dividend paying whole life contracts remove the uncertainty of what future tax hikes could do to your retirement savings. Now, what's the downside? The first and most important would be not doing it, not participating. Now that you know what you've learned this evening, you have options. You can do nothing and nothing will change. Or you can take the right steps in your planning and de risk your retirement, de risk your accumulation as you continue to set aside money until that time in your life. The second is that you have to commit to funding the policy. And thirdly, if you spend more than what you're earning, then this simply may not be for you. Now let's review. We know that risk is a silent retirement killer. That participating dividend paying whole life insurance can eliminate both stock market risk and tax risk. It can be used during your lifetime to finance everything that you need and provide a tax free insured retirement income. It's estate tax free and you can contribute almost unlimited sums to your policy and have guaranteed access to capital during your lifetime without interrupting any of the cash that's growing daily inside of the policy isn't that good. And it also protects your family when there's an early death and eventual death. It's not only the single biggest benefit in the tax code, but it's the most effective way to protect large RRSP or RIF account balances. Now I want to share with you just a little bit about working with us and just a little bit about our firm, who we serve, what our process is. Now what I will tell you is that our mission is to financially empower households and business owners who value total control over their money. Our philosophy is to help you take action. We give you recommendations that are Only in your best interest. By fulfilling our duty of care, we're committed to a lifelong personal relationship with you. This is not transactional. We want to commit to that lifelong personal relationship. We care about achieving your financial objectives as much as you do. However, being that we're coaching you through a process, as a coach, we are responsible to you, not for you. We are going to coach you on how to implement this properly. Our firm is known Canada wide for serving professional business owners, their families, throughout their entire lifetime and their entire financial journey. Now, our planning process and ongoing coaching helps you transition through all of those life stages. We help you take action on spending your life living during the growth phase, the transition phase. We provide recommendations that are in your best interest. And then in the maturity phase, retirement, leading up to your eventual death. We're committed to a lifelong personal relationship with you. We talked about how to schedule a personalized conversation so you already know how to do that. So we can gain a deeper understanding of your current life phase, your personal financial situation, your corporate financial situation, and we can decide what if there's a basis for us to work together. In that personalized conversation, we're going to talk about your situation. So where are you in your financial life cycle? What are your primary financial objectives? What are you worried about today? And what financial resources do you currently possess? And our process is pretty remarkable because we help you to stay on track and you do that by following our proven process. We go through a consultative process, we present our recommendations when they're implemented. We do a 30 day follow up to ensure that your plans in process and already progressing. We have a six month meeting where we meet to ensure that your objectives are on track and that we accommodate forever life changing circumstance. We have an annual review process where we monitor your plan. We meet at each policy anniversary, we make any necessary adjustments to ensure that we maintain continued alignment with your objectives. And by focusing on four key areas, by focusing on that, we can design a financial strategy that's specifically tailored to your circumstances, your objectives. If you want to grow indestructible wealth, if you want to save tax, if you want to retire by design and create a significantly larger estate, we can help you, our team, everything that happens inside of our business is all the credit goes to my teammates. The diversity in the skill sets, the expertise, the designated expertise that we bring to the table is really unmatched. You know, we're very unique in the marketplace. Our advisory team gives all the recommendations, attends all the meetings. Our client service team who are phenomenal, they ensure that all your service requests are taken care of with a mission of great service every day in every way. And our strategic team of chartered accountants, trust and estate planners, certified financial planners, all the professionals that we bring to bear to provide expert guidance and make sure that you're getting designated advice is really unmatched in the marketplace. In our administrative team, our strategic assistant team are there to ensure that all of your needs are handled.

Now, I shared earlier something that Nelson Nash said often, and that is when you understand the problem, the solution will become clear and you'll know exactly what to do. And I think that we've presented the problem, we've presented the solution, and we believe that it's clear enough to take that next step and have that telephone call. Talk to us, that Zoom meeting, talk to us about your current situation. Let's see what we can do to help you solve the problem. Now, getting started is simple. Schedule that time, you know what to do. Click the link, you receive text the word schedule. 780-809-4599 now with that, I want to open it up to some Q and A. Let's dive into a little bit of Q and A. What have we got?

The cost is your time.

And your commitment to achieving your objectives. You will not be invoiced from us. So we're not a fee for service advisory firm. When a participating policy is put into place, the insurance company itself has a budgeted pool of money that they use to compensate their human resources, home office personnel, etc. We are remunerated from that very same pool of dollars. And so the only cost to you is your time and your commitment to seeing the achievement of your financial objectives.

So from the moment that the policy is created, the policy has a surrender option. And so at any time, the policy owner can surrender the contract back to the insurance company and the insurance company will return to the individual, to the business whomever owns the policy, the insurance company will return the total cash value of the policy if there's a loan balance outstanding at the time that the policy is surrendered. So if the individual or the corporate owner exercised a policy loan to buy something and there was a loan balance outstanding, that loan balance would be deducted and the remaining cash value returned to the policy owner. There are no surrender charges of any kind.

You don't have to be the life that is insured to be the policy owner. So you can insure someone that you have a beneficial interest in. And that someone could be a parent, spouse, business partner, joint venture partner. If you're Active in real estate, we deal with joint venture relationships all the time. Shareholders that are key people inside of your business, children, grandchildren, nieces, nephews. So really, anybody that you have an insurable interest in.

Now, if you're at that stage, stage in your life where you're drawing a pension income, well, you may have family members who are still long before their retirement phase of their life who are driving cars that aren't paid for financing homes that aren't paid for carrying around purses and wallets with credit cards that have revolving balances. And you may be able to put yourself in a position where you can take over the financing function as it relates to those needs. And you can have that cash flow coming to you that would further supplement your income. So the best thing to do is to schedule a time, have that initial insured retirement solution call and see if there's a basis for us to help you. And we can drill down a little bit more and get more specifics on your financial circumstance. And we can let you know if we believe that we would be a good fit.

The answer is yes. So when the whether it's the business owner or whether it's yourself personally, you'll make a determination as to what's comfortable and affordable in terms of what you can contribute to your policy or your system of policies. And we engineer the policies so that the amount that you choose is not the amount that you'll be contractually obligated to pay, it'll be less than that amount. So that right out of the gate gives you added flexibility and control.

And Justin, we have some business owners on the call today. Maybe you can talk about key person insurance in the business and how that's all put together and how that's all used for the business I think will be important because I'm sure nobody speaks to all that.

I'm going to ask you this question. When you get to your business tomorrow or even this evening, if you have access to your financial statements, I want you to pull up your balance sheet. I want you to pull up your balance sheet and I want you to take a look at that very closely. And I want you to find you on the balance sheet. And I guarantee you that the most important asset that should be on the balance sheet isn't there. And that's you. Your accountant has taken into account everything, all your inventory, your equipment, your wages, your overhead, your opex, your capex, your, all those things right down to the last stapler in the building. But the most important asset on the balance sheet isn't taken into account. And that's you. You insure your buildings, you insure your property, you insure your business equipment, you insure your business overhead, but yet you don't insure yourself or the key people who you rely upon so heavily to contribute to your business and to ensure your business is ongoing, sustained, profitable operation. What on earth are you thinking? You've got to insure yourself and your key people without delay. The longer you wait, the more you penalize yourself. And so you've got to rethink your thinking and you've got to take that very important action step, because everyone's going to die. It's not a matter of if. It's when. And if you insure a key person in your business and they decide to move on from the business someday, the policy doesn't go away. Your insurable interest in that key person doesn't go away. You hang on to that. That has value. You put a lot of time and effort and money and energy into developing your key people.

That's an asset that you get to hang on to. I want to say to all of you again, you made a great decision being here, and I'm looking forward to connecting with my teammates and hearing about these calls that you have with the right people on my team. And I'll tell you, you're going to be in great hands. We've got a wonderful team. I'm blessed beyond the definition of good fortune to work alongside so many wonderful people, and we'll make sure that you're connected to the right person on my team.