Archive for the ‘Lifetime Income’ Category

Race Car Driver Danica Patrick’s Quick Take…

Watch Danica Patrick talk about being prepared for the inevitable. Are you prepared?

Click to watch a few minutes…Danica talks life and death!

How To Convert Taxable Income To Non-Reportable Tax-Free Income?

Financial Strategy Alert – August 2013

An Open Letter To Premium Newsletter Subscribers:

Do You Know How To Convert Taxable Income
To Non-Reportable Tax-Free Income?

The best way to explain this is to let you inside on a conversation I had with my brother Mike.

Ok, Here goes, listen closely…

“You want to make more money, right?” I asked.

“Sure. More money would be nice,” he admitted.

I smiled. “Well, let’s start with what a ‘perfect’ investment would look like, okay?”

“It doesn’t have to be perfect. David,” Michael replied.

“By ‘perfect’ I just mean the kind of things we’d be looking for if we were looking to make an investment,” I said.

“Oh, okay. So you’re teaching me the basics, right?” he asked.

“Exactly.” I then explained that, ideally, the “perfect” investment would contain the following characteristics:

1. Tax-deductible contributions
2. Tax deferral on growth
3. Income tax-free withdrawals
4. Income tax-free survivor benefits
5. No plan administration fees
6. NO minimum or maximum contribution limits
7. Owner decides when they want to start withdrawals
8. Cash liquidity in case of emergency
9. Distribution amount flexibility at retirement
10. Some protection from creditors
11. Guarantee against investment losses!

“Now the perfect investment would mirror these eleven characteristics,” I told Michael. “But with the federal government and many states combating major budget deficits at all levels, this ‘perfect’ investment doesn’t exist.”

“Bummer,” replied Michael, sounding genuinely disappointed.

“But, with the proper investment-grade-designed life insurance policy structured correctly, you’ll still be able to get ten out of those eleven characteristics.”

Michael looked at my dad. “I can do that? Really?

The secret is pure mathematics—put in the maximum amount of money and buy the minimum amount of life insurance death benefit allowable so you keep costs down and maintain the tax deferral benefits .

In your later years, you can withdraw money tax free via the borrowing provision in your policy. You’ve now created a whole new vehicle to fund retirement strategies. The money you put into the policy after deducting expenses remains in your account.

How is the money invested? In this example, it is invested in an Index Universal Life policy, the S&P 500 index without dividends, and grows tax-deferred with a floor of zero percent return on your investment. It’s every investor’s dream—invest where you take all the up years and none of the down years.

I pulled out a two-page presentation showing my brother Michael putting away $50,000 per year for twenty years—from his current age of thirty-one to age fifty-one—totaling $1 million.

At age sixty-six, based on the illustration showing the S&P index less dividends at 7 percent per year, he could withdraw $432,900 annually tax free until the age of eighty. So my brother puts in $1 million over twenty years and then he can withdraw $6,493,500 million tax free over fifteen years based on our example. That’s a 6.4 to 1 tax-free return on his investment capital—and all the time his life insurance is still in place.

Sample Summary
Life Insurance Retirement Strategy Using Indexed Universal Life Insurance
Michael Age 31
Annual Premiums: $50,000
Scheduled Years to Pay: 20
Total Premium Paid: $1,000,000

Annual Distributions Age 66-80: $432,900
Scheduled Years of Distributions: 15
Total Distributions: $6,493,500


I used simple math to show Michael how he would pay the annual premium in the policy only once per year and combine the compelling tax-free benefits of the cash buildup inside a life insurance policy and the potential to profit owning life insurance. As Big Mike said, “I don’t see how not working and making almost half a million dollars a year at retirement can be bad!”

Can You Have Your Cake (Money) and Eat (Spend) it to?

What’s More Expensive?

Withdrawing money from your investments or pension plan after paying taxes or…asking the life insurance company to advance your death benefit proceeds tax-free while you are alive?

 Is that really possible?

Yes, it’s simple with a special chronic illness rider added to your policy to access death benefit proceeds while you are alive.

Why do I need this option?

2 of 3 people over 65 will require long term care. For how long? 3.9 years on average for claims lasting over 1 year.

 What are the costs for care?

Semi-private nursing homes are over $100,000 per year. Homemaker services are over $50,000 per year.

Do people really care about this topic?


• 75% of individuals have not had a conversation about Long Term Care planning in the last 12 months.

• 78% of individuals say that they would find it helpful to talk to a financial professional about Long Term Care planning but only 16% have had the conversation.

Umm, interesting isn’t it?

So how do I find out how to access death benefits proceeds while I am alive versus paying taxes and depleting my investment and pension money?

Just respond to and we’ll send you the math. Want to see a case posted on the blog? Just ask.

If You’re Parents, Grandparents or In-Laws are 65 To 90 Years Old…

…You May Qualify To Double or Triple Your Current Income & Receive a Return of 100% of Your Principal


The Good News: The older you are the more they pay. For example: the current highest  SPIA payment on a 78 year old male is 9.8%. That’s almost 400% higher than the 10 year treasury!

The Bad News: The current SPIA payment on a 55 year old male is just 4.5%

Solution: Children buy SPIA’s on their parents, in-laws and grandparents…not on themselves. (This strategy can also work with the parents, grandparents or in-laws buying the SPIA and combo-strategy below on themselves with a few changes)

Combo-Strategy: Combining a life insurance policy and a  SPIA in an income strategy produces a result that is comparable to a bond in a number of ways. Like a typical bond, the SPIA strategy provides a regular stream of income. A bond provides a return of capital after a stated period of years. Similarly, the immediate annuity strategy combined with life insurance provides a return of capital tax free at the death of the insured. You get the best of both worlds, higher income during the lifetime of the insured parent and 100% return of principal at the death of the insured! 

To receive a case study and learn how John Jr. implemented this strategy on John Sr., his 78 year old father,  and increased his income from $19,500 after tax to $95,160 after tax for 11 years