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How to Create Your Own Personal Retirement Bank with Life Insurance

Last update on: Jul 23 2020

Have you heard of the “Secret 770 Account” and “The President’s Account?”

Or maybe you’ve seen these: Banking on Yourself® or “Infinite Banking?”

Or perhaps even these: “Becoming Your Own Banker,” “The Personal Bank,” or “The Retirement Miracle?”

If you read financial publications, especially online, you almost certainly have come across some of these.

You’ve been told these financial tools are confidential, new, revolutionary, and, of course, Wall Street’s hidden secret.

You’ve been told that only a privileged few of the well-connected have used them, including presidents, major corporations, and the very wealthy.

You might be told banks and Wall Street don’t want you to know about them.

The names I’ve just shown you all describe the same thing.

The strategy isn’t new, secret, or exclusive.

It has been and is used by many prominent and well-connected people as well as major businesses.

Walt Disney Co. and McDonald’s were started with the help of the strategy…

But it’s just as readily available to regular Americans, as it is to the 1%.

More importantly, recent events have made the strategy more attractive than it has ever been.

People who wouldn’t have considered it in the past should consider the strategy now…

Because it’s a way to create your own personal “retirement bank” – and build out your estate for the long haul.

Here’s why…

You earn safe, steady tax-free returns of 5% to 8% on your cash value investment account, and you don’t have to worry about market risk.

You also have tax-free cash available to you and your family whenever it is needed.

In essence, you have a family bank, which is why it’s known as the Family Bank Retirement Strategy.

There are other benefits to the Family Bank Strategy, some of which I’ll explain shortly.

The linchpin of this strategy is cash value permanent life insurance.

Now don’t run away or get scared off!

With this strategy, you reap these benefits from a product that’s been around for at least a couple of hundred years (provided, of course, you structure the Family Bank Retirement Strategy correctly and follow the rules).

It is true that cash value life insurance has been maligned over the years, some of which is warranted.

But things have changed, in a big way.

Permanent life insurance policies now are more favorable to policyholders.

You won’t have the opportunity to earn double-digit returns in the cash value account.

But you won’t be subject to investment losses or limited to the fixed 2% returns of the past, either.

You’ll earn those steady, solid returns of 5% to 8% I mentioned on your cash value, and those returns compound tax free. You also don’t have market risk.

Bottom line: Once you’ve earned a return, the markets can’t take it away.

Taxes: Another Reason the Family Bank Retirement Strategy Works for More People These Days

You see, income and capital gains tax rates on higher-income taxpayers were increased in 2012.

Many states also increased their taxes in recent years.

But here’s what counts the most: After-tax wealth.

Both the death benefit and the cash value account within a life insurance policy have been totally free of income and capital gains taxes since the passage of the 16th Amendment (income tax) in 1913.

Unlike term insurance, permanent life insurance doesn’t expire, and the premiums don’t increase as you age.

More importantly, with permanent life insurance, you can have a cash value account that earns steady interest.

And that interest accumulates and compounds tax free.

And that’s just for starters…

  • You can borrow from the cash value account tax free and interest free.
  • When you need money for an investment or expense, you can borrow from the policy.
  • If a family member needs money, you can make a loan to him or her from the policy.
  • You don’t have to charge interest, and you can forgive the loan later if you want.
  • The loans from the policy can be paid back on your schedule or no schedule at all. When loans aren’t repaid, the unpaid loans reduce the death benefit paid to your beneficiaries.
  • Your loved ones or charity eventually receive the policy’s death benefit. They won’t owe income taxes on it, and the income that compounded, net of the cost of all the life insurance over the years, avoids income and capital gains taxes.

The Foundation of the Family Bank Retirement Strategy: The Life Insurance Benefit

The life insurance benefit is passed to your beneficiaries tax free.

But if you minimize the death benefit, staying within IRS limits, you increase the rate at which the tax-free cash value account grows.

The Family Bank Strategy is creditor proof, and you don’t take the risk of investing with frauds, cons, and corporate thieves.

Your investment and income are backed by an insurance company.

Most insurers are over 100 years old. They have survived and thrived through the world’s most difficult financial crises, including the coronavirus market crash.

Life insurance, of course, doesn’t have contribution limits and doesn’t have required distributions for you or your heirs, as an IRA does.

We’re just scratching the surface on all the important details here, so look for my next story on the Family Bank Retirement Strategy, in which we’ll answer some of the most frequently asked questions.

Publisher’s Note: To learn more about this, along with hundreds of other great retirement strategies, be sure to get a free copy of my new e-book, the NEW AMERICAN RETIREMENT PLAN. To find out how, follow this link.



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