Join Nate Scott in episode 219 of the “Dollars and Nonsense” podcast as he unveils how Infinite Banking can revolutionize your approach to retirement. Moving beyond traditional retirement concepts, Nate delves into the power of Infinite Banking in creating a sustainable and fulfilling future, emphasizing the need to build a life you won’t need to retire from.
In this episode, Nate explores four transformative ways Infinite Banking can bolster your retirement: consistent policy growth, access to funds, tax-free income benefits, and the role of policies as a volatility buffer. He sheds light on how these elements work together to enhance your financial security during retirement.
Listeners will also be introduced to the concept of the Retirement Trifecta – income, liquidity, and legacy. Nate discusses how Infinite Banking can address each of these critical aspects, providing solutions that traditional retirement plans often overlook.
Key Topics Discussed:
- Redefining Retirement: Nate challenges the traditional retirement model, advocating for a life so fulfilling that retirement becomes an option, not a necessity.
- The Power of Policy Growth: Learn how the guaranteed growth of Infinite Banking policies can provide a stable foundation for your retirement finances, ensuring a reliable income stream.
- Tax-Free Policy Distributions: Discover the advantages of tax-free income from Infinite Banking policies, offering a flexible and tax-efficient way to manage retirement funds.
- Volatility Buffer: Understand how Infinite Banking serves as a protective shield against market volatility, ensuring your retirement income remains stable even in turbulent financial times.
- Solving the Retirement Trifecta: Dive into how Infinite Banking uniquely addresses the three critical components of retirement – income, liquidity, and legacy – and how you can leverage these for a secure future.
Episode Resources:
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LIVING WEALTH PODCAST
DOLLARS AND NONSENSE: EPISODE 219 TRANSCRIPTION
Nate Scott [00:00]:
I believe that everyone’s ultimate goal should be to build a life you don’t have to retire from. The conventional idea of retirement has brought more harm than good, but I know that most folks will end up retiring one day. So in this episode, I want to discuss the four ways that practicing infinite banking can improve your future retirement. I’m Nate. I make sense out of money. This is “Dollars and Nonsense”. If you follow the herd, you will be slaughtered.
Nate Scott [00:28]:
Everybody, welcome back to the show. It’s so great to have you for this week’s episode, which I am going to branch a little bit off brand for this and talk about retirement. People have been listening lately or even for the entire length of the show. I don’t believe in the conventional idea of retirement. I think that it causes more harm than good. I think that as people are working and their main objective financially, the default objective financially, is to build retirement accounts and retirement income reservoirs for the future.
And so people find themselves working at jobs they don’t like, saving money in accounts that they really don’t even believe in, doing things with money just because they feel like they should, because one day they’re going to have to retire, and they don’t ever confront themselves with weightier things in life. About, “hey, is what I’m doing for the next 40 years even what I want to be doing? Why am I so fixated on the idea of retirement?”
So instead of retirement, I’ve always been a fan of what I call the empire method versus the retirement path, which I’ve done a podcast. You can go to episode 200 to review what I really call the Empire method, which is building a life you don’t have to retire from.
Nate Scott [01:28]:
If that’s your main goal, then what you use your money to do and the investments you make are going to look different than if your main goal in life is to retire one day. So if your main goal is instead to build a life you don’t have to retire from, you’re going to end up doing different things with money. I firmly believe that.
And I think infinite banking also helps the empire pathway tremendously, but it can also help the retirement pathway. And so in this episode, I’ve got four main things that you can expect to take place whenever you practice infinite banking, and you’re going to retire with it. And so we’re going to dive into the four ways that infinite banking will hopefully improve your retirement, or at least will affect your retirement as it comes down the pike. So let’s go ahead and dive in. The very first thing I wanted to do was talk about.
Nate Scott [02:07]:
So the very first way it will improve retirement is through the policy growth itself. So if you’re doing infinite banking, of course you have infinite banking policies. You have one or maybe more than those. And what I don’t want to push past is the actual growth of the policies is tremendous over time, due to compound interest, of course, and the fact that it’s 100% guaranteed to grow plus earn dividends over time.
It can actually produce a very, very significant and steady, consistent income without having to worry about anything else going on. And I wanted to kind of paint the picture of this just by looking at one of my wife’s policies. By the way, I’ve got a policy illustration printed here just on one of my wife’s policies, and I just chose hers because it was sitting at the top of the pile. And I’ve got like eleven policies now.
Nate Scott [02:51]:
So this is just one of them. And they’re all of varying sizes. This one’s kind of a middle of the road size. And I took a look at her age 65 situation. If we’re going to talk about retirement, even though I don’t like to do that, let’s go ahead and talk about it in the conventional way. So we’re going to assume she’s 65 and her cash value is $3.5 million in this policy at her age 65. Now, I don’t want to get caught up in the number. That may be a huge number to some of you.
Nate Scott [03:13]:
That may be a small number to some of you. This is just one of the policies I own anyway. But by the way, at her age 65, so she’s like 30 right now. So it’s 35 years from now. I don’t even know if three and a half million dollars is going to be worth anything, to be honest with you. So we’ll find out what happens. So she’s got three and a half million dollars of cash value in this policy. The base premium of this policy at that time is $10,000 per year and the growth of the policy at age 65.
Nate Scott [03:39]:
So it’s got three and a half million dollars in, but it’s growing by $202,000. So the growth of the cash value is $202,000 at that time. So essentially what’s going to happen is we’re going to enter age 65. We have all these policies and they’re all growing very well. And hopefully I’ve been leveraging those policies to invest elsewhere, buying other assets, which is just going to help boost the income across all sources tremendously. But even if I just had the policy, it’s growing tremendously at that point. Of course it is. It’s been around for a very long time.
Nate Scott [04:08]:
It’s very mature. It’s compounding very, very well. But she’s putting in $10,000 into her policy in a base premium, and it’s causing a $202,000 cash value growth at that time. With all this being said, when you enter retirement, nobody is going to complain about having a $200,000 cash value increase each and every year that they can use to live off of, right? The question that I wanted to answer in this podcast episode was also the idea of how do you put, like, there’s some confusion here, by the way. So I just gave you the parameters. The policy has three and a half million dollars of cash value.
Nate Scott [04:40]:
There’s a $10,000 premium, and there’s $202,000 of cash value increase at age 65, people can be confused as to how they get the money out of the policy. How do you pay the premium if you’re retiring and you’re not earning an income? And they have questions all along this front. I did a full retirement presentation in our free beginners course at https://livingwealth.com/. If you want to dive into some more detailed numbers and more detailed ideas, you can go to https://livingwealth.com/ and get the free beginners course there and go to the retirement videos in that course, and it will show you a real policy in action with pulling retirement income and from it and so forth. So this job is just to kind of just paint the picture really quick, which is the reality is when you enter into a period of time in retirement, the first question people will ask is, how am I going to pay these gosh darn premiums? How am I going to fund the policies when I don’t even have any income coming in from my job? I’m retiring, right? It’s more confusing than it needs to be. I think people confuse themselves. They think it’s more complicated because they don’t see the policy as a bank. They see the premium as a payment.
Nate Scott [05:38]:
So they’re like, how am I going to make this payment if I don’t make the $10,000 payment? Something bad is going to happen. People listen to me. When you have a policy that has three and a half million dollars of cash value is growing by $202,000 a year with a base premium of $10,000. Let me make it nice and loud and clear for everyone in the back, too. If you don’t pay the $10,000 premium out of your pocket from other income or asset reservoirs, nothing bad is going to happen. They do not take your three and a half million dollars, lapse the policy, kick you out and say, good luck, thanks for doing business with us. You didn’t pay your premium this year. Things are gone.
Nate Scott [06:11]:
And I say this kind of facetiously, but the reality is people think this way. People think that there’s going to be some sort of huge negative consequence if they don’t pay the premium at some point in time. So a couple of things I want to note. First off, the honest truth is, if you had any scenario in the world that says, hey, if you give me $10,000 today, I’ll give you $200,000. Fact, I don’t think of anybody in the world who would say, I don’t want to do that. Right? I mean, first off, I think we’re kind of in a la la land here. The idea that you couldn’t find $10,000 from something, you could take your Social Security check, use it to pay the premium, and get your $200,000 of growth, then use it. But the reality is, even apart from that simple understanding, the truth is you can just simply use the policy to pay for itself.
Nate Scott [06:48]:
This is the obvious situation. This occurs very quickly in the policy. I’ve done videos on this as well. You can go to our YouTube page or to our website to find videos on how policies can pay for themselves. It’s a very common discussion we’ve had in the past, but the reality is you would typically just use the cash value. You take $10,000 out of the cash value to pay the $10,000 premium, and then the policy could still continue to grow on that full three and a half million dollar balance. And you would earn, essentially you put in ten grand out of your pocket and it produced $202,000 of cash value. And the way I think, that’s a $192,000 profit you just made.
Nate Scott [07:18]:
You could pull out the $192,000 in profit, or actually you could write a check for $10,000 out of your pocket and then pull out $202,000 from the policy as a withdrawal, which really means you have $192,000 more than when you had the $10,000 in your pocket, and you could just live off that and you’d be right back. You wouldn’t have even touched the principal at that time. So the policy growth is going to be very powerful. Most people have questions about premiums in retirement. Normally you just turn off the premium in one of three ways. You either use withdrawals to pay the premium, use policy loans to pay the premium, or you do a reduced paid up and just completely get rid of the premium altogether. We talk about that in the video that I did on how to have policies pay for themselves, which you can watch in detail, but the reality is that growth of the policy should never be understated. The reality is, for most people who practice IBC at a high level, like myself and a lot of our clients do, because we’re kind of the advanced, like Living Wealth and the “Dollars and Nonsense” podcast.
Nate Scott [08:08]:
The goal is to try to create more advanced topics because we’re trying to attract people who want to do IBC at a high level. That’s who we want to attract because that’s what we like to do. So I’m just saying, if you’re doing IBC at a high level, even if you never even touch the policy, if you just paid big premiums and use it sparingly, you’re going to be pretty good in retirement. You’re going to be doing just fine with no concern about any sort of outside market busting event that could derail it, which we’ll talk about in just a minute. So the reality is, in my wife’s situation, all I would have to do is take $10,000 out of the three and a half million dollars of cash value that I have, and pay the premium. The policy is still going to grow by $200,000. In which case I’ll just take a distribution from the policy and use that to live on. We’re going to be doing okay.
Nate Scott [08:45]:
So the growth of the policies themselves, if you practice IBC at a high level, even if you’re using a lot of the money to go fund other investments, other business ventures, no matter what, the policies are going to get bigger and bigger and bigger and bigger. And they’re going to be compounding, compounding, compounding to the point where they’re going to produce for you a really great income at some point down the road if you ever should need it. And that’s a huge win. That is not correlated with any market based volatility measure. It’s just a steady guarantee to grow liquid money. That is the ideal money in retirement, certainly. So the first thing is policy growth. That’s the first thing that’s going to help.
Nate Scott [09:16]:
There’s the pure policy growth themselves. The second thing I wanted to talk about and how it’s going to benefit retirement is the fact that the income is tax free. So the fact that 100% of the policy can be accessed tax free, and that the income you pull from it is not reported anywhere. By the way, this is a unique thing. You can take policy loans from the policy. It’s not even reported anywhere. Like a Roth IRA distribution is a tax free distribution, but you have to report it’s kind of out there. The fact that you’re pulling money out of the policy, nobody even knows.
Nate Scott [09:42]:
That’s total freedom to me. Nobody even knows. The government doesn’t know. There’s no reporting anywhere of this money. So the fact that you can pull tax free income is a huge benefit. So, by the way, whenever you do go to draw income from a policy, you can do it in one of two ways. You can take actual withdrawals called partial surrenders, or just think of them as like a typical distribution from the account. And you can do those types of distributions, actual withdrawals of cash value, up to your basis in the policy.
Nate Scott [10:10]:
So, by the way, Ashley’s basis at that time. Oh, I didn’t print the right page to get the basis on my wife’s Ashley’s policy. I would guess the basis is somewhere around, I would guess maybe like a million dollars or so, maybe a little less, 800,000 to a million dollars in actual basis in the policy and the cash. Let’s say it’s a million dollars in basis, and we have three and a half million dollars of cash value. That means we’ve made a profit over time in the policy of two and a half million dollars, approximately. So if a million dollars in basis, three and a half million dollars of cash value, we have a two and a half million dollar profit. All of that’s been done tax free, by the way, the whole time. When it comes to retirement time, you can make withdrawals from the account up to your basis, tax free.
Nate Scott [10:48]:
So you would withdraw, let’s say, the million dollars of basis on a policy, tax free. And once you’ve withdrawn the basis over time for income, then you can transition to taking policy loans for income and just never, of course, repay the loan until the day that you die with your death benefit, which, by the way, her death benefit at that time was $8.2 million. So we’ve got plenty of buffer here. The reality is you would take policy loans because a policy loan is never a taxable event. It’s never a taxable event to take a policy loan against your cash value. So you would have a full string beam of unreported, tax free income in retirement. The reason why this is so huge. So not only is the policy growing well, but it’s going in a tax free environment.
Nate Scott [11:23]:
You can pull tax free income, which means you can actually play a lot of games with tax brackets in retirement. So the fact that you have this huge reservoir of tax free income means you could essentially be in the 0% tax bracket if you wanted to, or you could pull a lot of income from the policy and income from maybe other sources could use up maybe the bottom tier tax brackets. But you’re not going– like pulling from an IRA or a 401K or these traditional sources is going to produce taxable income at ordinary income tax rates and is going to affect your Social Security taxation.
So, by the way, if you have income over like $40,000 in a year of taxable income from any of these sources, your Social Security income starts to become taxed and add to your tax bracket situation, which means you could boost all of your income into higher tax brackets and lose some of your Social Security income due to taxation that you can avoid with policies.
So, tax free income, having this big reservoir of tax free income can help you max out tax advantages in many different angles. So not only is income tax free, but it can affect other types of income and change how much tax you end up paying overall in many different ways. So tax free income, we can’t say it enough. It’s a huge benefit.
Nate Scott [12:32]:
You can get similar issues with Roth IRAs. The problem with, as we know with Roth IRAs, is that their contribution limits are very low. So you can only contribute a small amount to Roth IRAs, whereas a policy contribution is unlimited. You can essentially get any size of policy you want. You can buy within reason, within your financial situation. So there’s no true contribution limits, which is huge, to not have any contribution limits, and also be able to pull tax free income from it later on. So it’s a big deal. That’s the second one.
Nate Scott [14:34]:
The third one I wanted to talk about is what’s known as the volatility buffer. The volatility buffer. And I talk about this in detail in the course. Again, the Living Wealth course that we have with the free course on infinite banking. You can go take that anytime you want. But we talk about this volatility buffer, and here’s what this really means in the market and in most assets that are not like policy policies are not correlated to any asset. They’re guaranteed contracts. They’re guaranteed to grow and have cash value in the future based on contractual obligations, not based on some sort of bond index or stock market index or things like that where your principal balance can go up and down.
Nate Scott [15:04]:
So anything that’s volatile is a dangerous place to build your entire future outlook on life. So things that are very volatile, like typical retirement program style assets, where the actual account balance can change dramatically, it can be $2,000,000 one day and a million dollars in six months based on a huge stock market bubble collapse like we had in 2008. And you never know when those things are going to occur. You have no clue whenever you’re 65 whether it’s going to occur right now or ten years from now. All we know is that they do occur. Bubbles burst. Accounts lose a lot of money occasionally, and this is just, it’s just the ebb and flow of the market. Everybody knows this.
Nate Scott [15:39]:
So because of this danger zone, people don’t typically, by the way, mind it when they’re building up their assets. You can go through some collapses, market collapses and crashes, and you can survive them and just wait them out and wait till the market comes back up. No big deal. In retirement, though, you no longer have the luxury of waiting it out. You need these assets to produce income.
So, that means you are required in market crashes to sell off assets, which means you have less and less to rebound when the market turns around, which means you have to be more conservative than maybe you would want to be, because we don’t know what the future holds. And if you start selling your assets, which is the only way to draw income from conventional retirement account style assets, brokerage account style assets. The only way to generate income is to sell the assets.
Nate Scott [16:22]:
Anything that requires you to sell an asset to produce income is not the best income source. Like, this is just a truth in life. Anytime that you’re banking, your ability to retire on, having to sell assets at certain prices in a volatile marketplace is just a bit dangerous. And people, it’s not just me saying that. It’s just the whole world of financial planning says this. So they come up with this idea called the Monte Carlo simulator, which is essentially just like a risk based simulator that takes into account all of the history of the market and the current environment for the market that we’re in and spits out success rates for certain amounts of income you want to take out.
So the idea is like, if you have a million dollars in a market based account, in a typical account, they’re trying to say, what? How much can you actually withdraw from this million dollar account without fear that due to market conditions in the future, you’ll run out of money at some point? And they come up with this idea that you can typically pull 3% to 4% of the account value every year from the day that you start. So if you start with a million dollars, they’re saying you can pull out 30 or $40,000 per year and safely make it through a 30 year retirement.
Nate Scott [17:29]:
So if you’re like, 65 and you think, I want to make sure I have enough income to live until I’m 95, they’re saying that in the Monte Carlo simulator, a 3% or a 4% withdrawal rate, they call out the amount of money you’re going to pull out each year, will allow you to get there with very little risk of not getting there, of living, outliving your money, your money dying before you die, and suddenly you’re broke and have to go move in with family or whatever it is, or trust the government to take care of you.
And so what I’m trying to bring up is because, here’s the reason why, by the way, I don’t think I even brought up the reason why. The reason why it’s so low, even though the market averages bigger returns, is because in retirement, the whole average return over a period of time, rebounding losses, goes out the window. It doesn’t matter anymore. And so if you look at, I think it was 1970 through 1999, that 30 year period of time was the best 30 year period of time to be in the stock market in history.
You would have averaged the greatest rate of return. In fact, the rate of return was over 14% over that 30 year time frame from 1970 to 1999, the greatest return. So the way I like to look at it is, if you have a crystal ball and you’re retiring in 1970 and you have a million dollars in 1970 and you have a crystal ball saying, hey, the market will average for sure.
Nate Scott [18:40]:
Like, you can time travel and find this out, that it will average for sure 14% on average. Most of us would assume that that means that I should be allowed to take out $140,000 a year and never impact my principal balance of a million dollars. So I have a million dollars, 14% rate of return each and every year for the next 30 years, which would mean that I should be able to pull out $140,000 every year without touching the million dollars. I’m just going to take the 14% profit that it’s making each year. And so it is perfect. By the way, here’s how this works. If the market actually did do 14% every year for the next 30 years, you absolutely could do that. You could just take out the 14% growth each year of $140,000 and never touch your million dollar principal and you would die.
Nate Scott [19:24]:
Leave a million dollars and you would have had $140,000 in income. That sounds great. That’s a 14% withdrawal rate. That’s awesome. However, we know that the world does not work like this and the market does not work like that. In a steady line, it goes up and down. You’ll have some years where you might make 30%. You have some years where you’ll lose 30%.
Nate Scott [19:39]:
And so over a period of time, the average is 14%. But that’s not actually what we experience. So if you were to take out $100,000 a year and not even do the 140, you just take out $100,000 a year, a 10% withdrawal rate. If you actually ran the numbers with the real returns, which we show in the course, by the way, I think you’ve run out of money in like 14 years. It’s like twelve to 14 years, you’re totally broke. You start with a million dollars. You knew that over the next 30 years it was going to be a 14% rate of return. You only chose to withdraw 10% instead, 14% and you’re broken in twelve years.
Nate Scott [20:06]:
This is where the Monte Carlo simulator, the low withdrawal rates come from, it’s the fact that the sequence of returns is a huge risk in retirement. When you’re building wealth, the sequence of returns is not as important. Whenever you are distributing wealth, the sequence of return. Like, did you lose a whole bunch of money due to a market crash early on? or was it later on in retirement? the sequence of returns will actually predict your success or failure. And since you have no idea what sequence of returns you will experience in retirement, this is why they say you can’t risk pulling out higher amounts of money.
Because over time, over any 30 year time period in the past, there are many different instances where a 5% withdrawal rate would cause you to run out of money. Having a million and taking out $50,000 a year, that you would actually run out of money somehow because of the sequence of returns.
So this whole thing was just set up to say that if you have money in other assets, whether it’s real estate, whether it’s the stock market, whether it’s retirement programs or whatever it is, if you have assets that can move around and fluctuate in price and fluctuate in the amount of income they can produce, and so forth, if you have volatility involved, anytime you can have a big reservoir of capital like policies that are not affected by volatility in any way, you can actually pull money from the volatile accounts at higher income rates, withdrawal rates, because you can always transition from having a non volatile bucket and a volatile bucket.
Nate Scott [21:35]:
So in good years, you can pull out big income from the volatile place, like a retirement program. And in down years, whenever you lose money in those programs, you can choose to pull from policies instead, which are not affected by market volatility and wait for the account to get back up to a healthy level. And so this is why they call types of things like policies a volatility buffer. It buffers the volatility you can actually pull out.
Between both reservoirs, you can pull out far more income than if you had all the money just in the volatile section. If you had a million in policy and a million in the stock market, or you just had 2 million in the stock market, what we’re trying to say is you would actually end up being able to pull out way more income from having a million in policies and a million in the stock market versus having all 2 million in stock. And so that’s just science, by the way. This has nothing to do with, this is just the reality of having non volatile assets in retirement.
Nate Scott [22:26]:
So the third thing was the volatility buffer. And the last one, the fourth point I wanted to make is what I call the retirement trifecta. So the retirement trifecta is there are three things that if you’re going to retire, which I’m not a huge fan of, but I guess technically, even if you don’t retire, these three things are the main things, financially, that everyone needs to care about, honestly, at any given moment in time. But it starts to get heightened as you get out of your working career. So the retirement trifecta is, number one, income, number two, liquidity, and number three, legacy.
So income, liquidity, and legacy are the retirement trifecta. You have to solve for each one before you move on to the next one. So you have income, liquidity, and legacy in that order, which means nobody should care about trying to make sure that their kids receive a legacy or the charitable organizations they want to support receive a legacy from them if they have to eat beans and rice because they don’t have enough income, if they have to go on the alpo it because they don’t have enough income.
Nate Scott [23:23]:
So the first thing you have to solve before you even start talking about legacy money is where am I going to get my income from? How much is it going to be? Is it going to be sufficient? So you solve for income first. And so the first thing you have to figure out is, where’s my income coming from? The reason why I think policies can help so much, by the way, just really quick, is that inside the policy, there’s actually, all three are checked just by the policies themselves. So the policies can produce income.
The policies are completely liquid, and the death benefit is one of the best ways to leave a legacy. So you have this trifecta already wound up into the policy, which can’t be said for everything. It can’t be said for anything. So the first thing you have to do is make sure you have enough income to live on in retirement. And most people would like to have income coming from very consistent sources, like policies or maybe rental income or passive income from real estate.
Nate Scott [24:06]:
They would want to have their income coming in from steady places. Once you have that solved for, the next thing you want to do is make sure that you have adequate liquidity that won’t affect the income per se. And so the reality is, if you have all of your money tied up in, let’s say, real estate assets and not very much liquidity, if you need liquidity at some point in the future and you’re in retirement, you might have a difficult time getting banks to talk to you because you don’t have any active income at that time.
Maybe you could get them to borrow against your assets. Whenever you borrow against the assets, then you get new interest payments, new mortgage payments. Essentially, it’s going to reduce your income that you can take out of. So it would be nice to have your income solved for and liquidity. So if you happen to need emergency money, or even, as I say, in the empire model, you want to continue to invest money, it’s going to need liquid capital to invest money and continue to build out a life you don’t have to retire from.
Nate Scott [24:59]:
So the reality is, if you’re going to need liquidity in retirement, it’s great to have a pool of money that’s liquid and that honestly isn’t volatile. So that’s why we love policies. Not only because, as we already said, they can help produce income, but because they can also be your liquid reservoir to fund deals in retirement, to pay for final expenses, or to long term care expenses, or health emergencies, anything of the sort. So once you have your income solved for, then you have to make sure you have adequate liquidity solved for.
And the last thing you want to focus on is how to build the– If you have your income solved for, you have your liquidity solved for. How are we going to build the biggest legacy possible with our assets? How are we going to be good stewards of the assets that we have, and have them produce the amount of value to our families and the causes we care about upon our passing? And so all three of these things, the retirement trifecta, income, liquidity, and legacy, are greatly impacted and aided by having infinite banking policies in place at the time, because they can check all three of those boxes very, very well. The fact that we can do infinite banking and produce huge returns elsewhere by leveraging policies to make investments, hopefully can just improve all of this.
Nate Scott [26:05]:
However, even just the policies themselves, practicing infinite banking can be a huge win for you in retirement. Four typical ways you’ll see this happening as we close down. The growth of the policies themselves can be incredible as time goes on and they’ve had time to compound and grow to be able to pull income from the policies. The second thing is the income you pull is completely tax free and totally unreported. So that means that it can have tax advantages beyond just the income itself. But how it impacts how other things would end up being taxed due to the fact that it’s tax free, is a huge win in managing your tax consequences in retirement.
The fact that the policies serve as a volatility buffer, that you can have money in volatile places, but the fact that you have policies in place means that you can pull higher amounts of income from these other places without fear of running out of money because you have the volatility buffer in place. So essentially, it just means that by having policies in place, you can produce more income from every source, which is what we’re talking about with infinite banking, having your money do multiple jobs because you have the policies, things become available to you that they wouldn’t have been available to you if you hadn’t had the policies to begin with.
Nate Scott [27:03]:
And then lastly, there is for all of us, this thing called the retirement trifacta. The three things that every person in retirement for sure, but honestly, anybody needs to solve for as they age, which is income, liquidity and legacy. You have to solve for each one in a descending order, from income to liquidity to legacy. And the policies just do a great job helping solve all three of those things without internally, it can check all three boxes very well. And so because of that, it’s a great asset to get old with. It’s a great asset to have for your whole life. Whole life insurance is a great asset to have for your whole life. So because thanks so much for being here, by the way.
Nate Scott [27:36]:
Once again, I do believe that everyone here who’s listening to this would benefit from building a life you don’t have to retire from. However, retirement is going to be a thing. It’s probably going to be a thing in your life at some point. The fact that you have policies, you should educate yourself using tools like this on how policies will affect your retirement and hopefully improve your retirement by having them built and in place whenever you get to that to the end of the finish line.
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Nate Scott [28:12]:
That’s the best way to tell the algorithms that this content is good and meaningful to you. We appreciate you so much. Thank you guys so much for being here. This has been “Dollars and Nonsense”. If you follow the herd, you will be slaughtered. For free transcripts and resources please visit https://livingwealth.com/
