Join us for our first video podcast where we do a full presentation on an IBC Retirement Strategy!

Overview:

You can almost draw a line in the sand separating the time before and after discovering The Infinite Banking Concept®.

As such, your financial lives become divided in two:

1. All of the possible future decisions that can be made through the implementation of IBC.
2. All of the past decisions that were already made prior to discovering IBC.

Decisions made in the past were made with your best thinking at the time. They now, however, may seem suboptimal, learning what we know about IBC.

Whole life insurance is an asset that gives us the unique ability to make our future *and* past decisions work even better than we hoped - at the same time.

Be sure to check out the presentation at https://www.thefifthedition.com/52

(gentle upbeat music)

- Hi, everybody. This is John Montoya.

- And this is John Perrings.

- We're Authorized Infinite Banking practitioners

and hosts of The Fifth Edition.

Episode 52, Retiring with IBC.

This episode is geared towards people

who are five to 15 years from retirement,

and also those who may need a second opinion

about how to generate more income from their assets

without as much market volatility.

Now, we're gonna start with current events in the market.

We're six months through the year.

So it's July 1st, 2022 at the time of this recording,

and we're experiencing a pretty severe market correction,

a downturn in the markets that really,

we haven't experienced in close to 50 years.

The S&P 500 is currently about...

Is currently 20% down on the year.

The NASDAQ is about 30% down on the year.

So, for so many Americans who are relying

on their market-based portfolio for retirement,

these are really tough times.

And the fed is no longer talking about transitory inflation,

they've finally given up and just accepted the fact

that inflation is here

and so we also need to talk about

how that impacts retirement.

And this isn't a one off.

When we have the Federal Reserve

who is in control of the issue of our money,

essentially, we have manipulated money,

and so, this is the far end of the business cycle

that Austrian economists understand,

but Keynesian economists seem to really struggle with

wrapping their minds around the fact

that all this money creation does have consequences.

And so, regardless of this being 2022

and we're experiencing this, these aren't new phenomenon.

This happens in a cycle, and we're just repeating the cycle,

but now with evermore dire consequences

because our country is $30+ trillion in debt

versus $10 trillion in debt

the last time we had a great financial crisis,

the global financial crisis

is what we call it from 2007 to 2009.

So we have a debt that is three times larger than it was

close to 15 years ago when this all started the last time,

and the impact that this is gonna have,

well, it's not gonna be good.

We're already seeing the fruits of high inflation

and markets taking a dive.

How does this impact retirement?

We're gonna discuss that.

- Yeah, and you know, this is John Perrings,

and you bring up some great points.

And it's a pretty interesting time right now

where you look on LinkedIn,

and I see all these LinkedIn people that post a lot,

and they're flabbergasted that...

They're like, "Why does this happen?

Why are all these people, why are these companies

having layoffs all at the same time?"

And they're kind of like blaming CEOs and all this stuff,

and it's like, well, you know, one of the ways

I've heard this explained from the Austrian economist

point of view is, "Well, why does it happen

that all of these CEOs seem to make the same mistake

all at the same time." Right?

And so I think blaming CEOs and all this other stuff

is kind of a little simple when what we really have is...

I mean, just go back to 2008,

all the same stuff that we are doing

in the lead up to the last financial crisis,

we're doing all those same things.

We're printing money like crazy.

We're incentivizing spending.

Easy money, easy credit, all the same stuff's happening.

And so when that happens in the business cycle,

you get a misallocation of capital

and there's gonna be a correction that happens.

It's really pretty simple.

But I don't understand why more people kind of can't see it,

I don't know, it's like they think

it's a different reason every time.

So the Austrians have kind of been proven correct again.

They were correct the last time,

and they were correct the time before that

in the Dot-com bubble.

It's hard to predict when it's gonna happen,

but it has to happen because it's a massive misallocation

of capital because the time preference on money was changed

because it's so easy to get.

So all that being said,

now that we're having some corrections,

does it matter for the regular person?

And if it does, how so?

And I think that's kinda what we're gonna talk about today.

What are the impacts on retirement assets,

and how does it impact creating income for retirement?

A couple additional thoughts,

John Montoya and I were talking before

and it's kinda like a lot of people

are sort of like deer in the headlights right now.

Like, I saw today, someone who a lot of people

would consider like a LinkedIn,

like a CXO guru who does a lot of posting on LinkedIn.

And this guy just straight up said on LinkedIn,

posted, he's like, "I'm burying my head in the sand

and not looking at my stock portfolio right now,

and just pretending this isn't happening in the market."

And I'm like, "What? How's that possible?"

But I think it's a common thing

and I've heard a lot of people say it

like when COVID first happen,

people are like, "I'm not even looking

at my account balances right now

and my retirement accounts."

And so they just kind of ignore it

and kind of pretend like this investing for the long term

is the answer.

But there will come a point, if things keep going down,

are you really just gonna let it sit in there

and go all the way down?

And a lot of people will say,

"Well, it'll never go all the way down."

We don't know what's gonna happen,

but how much more do you have to lose

before you're forced to liquidate. Right?

And by the way, vice versa, when things are good,

how high does the market have to go

before you actually turn those gains into real gains?

Because until you do that,

everything's just a number on a computer screen. Right?

And so most people don't have this quantified either way,

and so they're always kind of stuck in the market

until it gets really bad and then they never ever realize

the gains when things are really good.

So, there's this idea of like emotional selling

and staying in the market, investing for the long term,

which I just said a minute ago,

but like emotional selling so-called is a problem

because people sell due to fear and then they buy back in

to the same volatile asset class.

So emotional selling is only emotional

if you don't have a plan.

And so this is kind of what we're getting into today.

So to market investors, the typical market investor,

there's never a "good time to sell"

because they're sort of trapped in this thing

where they don't wanna lose out on gains

but they don't wanna emotionally sell

because they just never have a plan for it.

So how can we help people get around that?

- And one of the things that we wanna bring up too,

is that unless you have a plan for your retirement

to generate income that takes into consideration your assets

built through 401(k)s, IRAs, maybe assets elsewhere

that helps to reduce volatility

in order to generate more income,

you basically have four options.

These are the four options that every retiree has,

save more, take more risk, work longer,

or reduce your expectations for retirement and live on less.

That's it.

And when presented with these options,

I mean, which would you prefer to choose?

Can you save more?

Are you willing to take on more risk?

Do you really wanna work longer

until maybe you're no longer able to work

and you're forced into retirement?

Or live off of less.

Those are the choices that are really being thrust

upon people who are trying to prepare for retirement

and they don't have a plan in place that can effectively

and efficiently generate the income

that they're gonna need in retirement.

And what we're gonna do here is show some examples

with how IBC and the planning that we do

can help to address these concerns that every retiree has

going into retirement, so that there is more peace of mind,

so that there is a plan on how they can generate more income

with less volatility.

So we're gonna discuss a couple different options

that we present to our clients.

And I think for all the listeners,

you're gonna be able to really identify some commonalities

with what you're currently doing for retirement

and where IBC can help you to get to that point

where you will have a plan that is logical, make sense,

and produces really what you want it to produce

which for all retirees is an income

that they can live off of and not be concerned

that they're gonna outlive their money.

- Yeah, and would you say that the four things

you just mentioned, that's what a typical investor has.

Those are the options that a typical investor has

if they're just kind of investing in the market,

is that what you're saying?

- Yeah, save more, take more risk, work longer,

or live off of less.

And what we're basically saying is those

are the traditional four options,

unless you're familiar with IBC

and the additional options that IBC can provide

on top of those four common options

that basically everyone has.

So having more options is always better than fewer.

- Yeah, right.

- This episode is really about,

"All right, well, I'm doing what I can here

because this is what my current financial advisor

advises me to do.

Or maybe I'm a do-it-yourself type of person

and I'm maxing out my 401(k)

and doing all the supposed right things

but I don't really have an idea of how I'm gonna turn

that 401(k) into income in retirement.

And the last thing I wanna deal with going into retirement

is worrying about the S&P dropping 20%,

the NASDAQ dropping 30% like it is now.

So what else can I do?"

Well, here are some options.

- Those are great points

because the typical financial planning advice

is really only focused on building up an account, right?

And so number one, we don't even know what that account

will end up being, but number two,

by the time you get to a retirement age,

you're really just stuck with whatever you have

and trying to get as much out of that as you can.

You don't have a whole lot of options

when you get to that stage,

especially with some of these pre-tax accounts,

because if you try to make a big move at that time,

you're gonna pay a bunch of tax

which sort of defeats the purpose of tax deferral.

And another thing to think about before we jump

into some of these slides, by the way,

this is our first video podcast that we've recorded.

So if you're listening to this on audio,

you can go over to thefifthedition.com

and see the video version of this

where I'm actually gonna share some slides

and talk about some stuff.

But we mentioned invest for the long term

which is the going wisdom out there,

and the truth is investing for the long term

will probably work pretty well

because you can take advantage

of some of the market volatility,

they call it dollar-cost averaging

where if you know, as long as you don't lose your job

and you're able to continue to buy

whatever you're invested in during downturns,

that can be a good thing because you're buying shares

at lower prices.

And so that creates a situation where they again,

called dollar-cost averaging,

if you're not familiar with that term.

You're averaging out the cost

and that you're creating a higher return for yourself

which will end up in a bigger account

by the time you get to retirement.

The problem is once you get to retirement

and you start distributing money from that account,

all the things that made dollar-cost averaging work

in your favor during the accumulation phase

actually work against you when you're pulling money out.

Because think about it this way,

if you have a certain amount of money you need to live on,

if you have to liquidate

and take out that much money every year,

well if there's a down market,

you have to kill off all the shares that you needed

for that account to recover in the future.

And so it becomes a really big problem

and this is called sequence-of-returns risk,

becomes a very big problem,

especially if these happen in the early years

of your retirement.

Before I jump into the slides,

is there anything you wanna add to that John Montoya?

- No, I'm ready to go.

- All right, I'm gonna share my screen here.

Okay, so sharing my slides here.

So this is...

What I'm about to show is kind of a culmination

of several webinars that I've given over the years.

And so I'm kind of sharing how that works,

but our financial lives and when we talk about retirement,

it's kind of like climbing a mountain

if you've ever heard this analogy.

Your working years are like climbing up the mountain

and your retirement years are like coming

back down the mountain.

And one of the interesting things,

I don't know if you've ever seen any documentaries

like of Mountain Everest,

what's interesting to know is that when those explorers,

when they die, most of them die actually on the way down

and a lot of people don't realize that.

And if you think about it,

this is what makes it a good analogy to retirement,

because what happens a lot of times

is during the accumulation phase,

things don't go exactly according to plan.

Maybe there's a...

When they're climbing up the mountain,

maybe there's a weather pattern shift

that causes them to summit the mountain more quickly,

or maybe delay their summit.

And so they end up, with exhaustion problems,

running out of oxygen, equipment issues,

and so that's what causes most of the deaths to happen

as they're coming back down the mountain.

And so it's very similar in retirement

where if this doesn't go exactly according to plan,

big changes have to be made

because the rules change once you get to the top.

So again, all those dollar-cost averaging features

work against you when you're coming back down the mountain.

So the problem is most people

when they're planning their retirement,

they're only planning this accumulation phase.

They're not taking into an account distributing money

so that they can live on the income in retirement.

They're only focused on building up a big account,

they're not focused at all on how to turn that account

into a big income in retirement.

So what we want to look at are both accumulation

and distribution, and we can kind of talk about this

in this format, the two economic powers.

This comes from organization

called Wealth Building Cornerstones,

they've done a really good job of kind of explaining this.

And accumulation power,

everybody's familiar with it already,

those are the fluctuating interest rates

and rates of return where you can get

in investment-based type financial products,

distribution however, comes from actuarial science

and so this comes from the law of large numbers,

and these are going to be insurance-based products.

And we're all familiar with these,

annuities are an insurance-based product.

It's really just the other side of the coin to insurance

where insurance protects you if you die too early.

An annuity protects you if you live too long

by giving you a guaranteed income for the rest of your life.

A pension, everybody's familiar with the pensions,

that's just a type of an annuity.

Social Security is just a type of an annuity, right?

So everyone is actually familiar with distribution power,

just not a lot of people have it built

into their plan anymore because there aren't

a whole lot of pensions out there anymore.

And so when we look at retirement

income strategy hierarchies,

if you look at like the folks out there doing the research,

they've kind of distilled this down into four strategies.

And we're really just gonna focus on number one

and number four.

The worst one is the one economic power approach

where we're only really looking at accumulation, okay.

And the best one, according to the folks

that are doing the research out there

is the two economic powers approach.

And so we're gonna focus first

on the one economic power approach

and we're gonna talk a little bit

about that dollar-cost averaging

and why that becomes a problem

when you actually want to retire and get an income.

So when you're only focused on accumulation power,

the problem comes again, when you have fluctuating returns,

when money is withdrawn from the accounts, okay.

So here's an example.

We're gonna look at a million dollar account value

at the day of retirement.

And this person, they're gonna retire at 65

and live to age 95, so 30 years.

What they're gonna do is they're gonna take out

a $100,000 a year which is 10% of their beginning value.

So 10% of a million is 100,000,

and they're gonna just take that out every year.

The average rate of return on the market account

is about almost 15%.

And so the logic here is, well, if I take out 10%,

but I'm getting returns of 15%,

I should be fine because I'm taking out less

than what I'm earning, and that would be true.

So if we go out and look at this retirement over 30 years...

I need to get my laser pointer here.

If we look at over 30 years,

this person took out $3 million over 30 years,

and they still have $15 million in their account

so that worked out pretty well.

The problem is we don't actually get the averages, right?

We only get what we get,

we don't get to call up our stock broker

and say, "Hey, I see the market stuff

that I was invested in averaged 14.84%.

Can you go ahead and put that in my account, please?"

And that's not how it works.

You don't get the average, you get what you get.

So what ends up happening is we have fluctuating returns.

And so we picked this range of years which is 1970 to 1999,

because it actually has a much higher average rate of return

than what we're kind of told we'll get

in the financial industry.

Usually they'll say, we'll get somewhere

between eight, 10, maybe 12%.

And so this is averaging almost 15%,

so it's a very high average rate of return

over this 30 year period.

But I wanna show even with this super high average return,

the sequence in which we get those returns matters.

So we can see that in the early years,

we had some fairly significant negative numbers,

even though it makes up for it over the 30-year period

and still giving us a 15% average rate of return.

It's the sequence of those returns

because in the real world,

we have high positive returns and we have negative returns.

So that sequence matters a lot,

especially when we get into retirement.

So if we look at this chart in another way,

using the real returns,

we have that million dollar starting value,

we're gonna take out 10% or a $100,000 a year.

And because we had these big negative years

and years four or five, years four and five,

and then another one in eight,

it actually killed off the capital that was required.

We had to liquidate more shares to get the same income

and so it crushed the account and was never able to recover

and this person ends up running out of money

in retirement in year 15 using this strategy.

So the way that the financial industry

has kind of come up to deal with this,

because we can run outta money early

if we're not careful about how much money we're spending,

the industry has started using or not started,

but they've been using for a while,

what are called withdrawal rate simulations,

where they just take thousands of probabilities

and thousands of samples over 15, 20, 30, 35 years

using these kind of rolling time periods

and they come up with different withdrawal rate simulations

on what's a safe withdrawal rate.

And you end up with some of these,

and by the way, you might be familiar

with Monte Carlo simulations,

where you might be familiar with the 4% rules

and people know what that is.

And what that means is here's the 4% rule,

what that means is I can take out 4% of my starting balance.

So using that $1 million example,

I can take out $40,000 a year

and the industry is kind of settled on this

being a safe withdrawal rate,

even though we can see here in this chart,

there's really only a 70% chance

of not running out of money, right?

So this chart shows the different withdrawal rates.

It shows the time span, and then over here,

it shows the percentage chance of not running out of money

or the percentage chance of success.

And so you can see right off the bat, this 4% rule,

it's kind of interesting that that's somehow

deemed the safe withdrawal rate,

but a lot of the academics out there

have settled on the fact that the 4% rule right now

is probably more like the 2.5 to 4% rule,

just because of all the things

that have been happening in the market lately.

So the two economic power strategy on the other hand,

we're gonna take into account both accumulation

and distribution.

So we're gonna plan for both of these things.

And by planning ahead, we can make...

And John Montoya mentioned it earlier, you know,

talked about options.

By having the distribution power plan for ahead of time,

it creates a situation where we have tons of options

by the time we get to retirement.

Way more than the one option you have,

basically when you get to retirement

with only accumulation power.

And I think I mentioned it before, you know,

this used to be kind of built in

to most people's financial plans called pensions.

Those are called defined benefit plans

prior to the 80s, which means you had a benefit

that was defined.

Another way of saying is you had an amount of income

that the pension plan offered you guaranteed

for your entire life.

So you had a very nice amount of money

that you knew you would get every single month.

In the 80s however, that was switched

in the advent of some of the qualified retirement plans

that was switched into defined contributions.

So the only thing that's defined is how much you put in.

You have no idea how much you're gonna be able

to get out of it.

And so what we're doing here essentially

is creating a situation where we're creating

a private pension for ourselves,

but we have several options

in how to accomplish that pension.

We don't have to actually use things like annuities.

We can use some different things

and I'll talk about a couple of those strategies here.

So what we're talking about here is creating a balance

between the economic powers.

And what we're looking for is an efficient balance

between accumulation power and distribution power.

So we want, by the time we get to retirement,

we want essentially a one-to-one ratio of investments

to what we would say is permanent

life insurance/death benefit.

We want a one-to-one ratio between these two things,

and that will create a much better outcome

than if we have an inefficient balance in either way.

So if we have too much investments

and not enough permanent death benefit,

it doesn't work as well.

And if we have too much permanent death benefit

and not as not enough growth factor

in the form of investments, it also does not work as well.

And so what this does is it gives us a way

to kind of calculate how much distribution power

we should have in the form of investment products.

So let's talk about this a little bit,

the two economic powers approach.

There are two strategies,

there's called the covered asset option,

and there's what's called the volatility buffer option.

And I, by the way, I know I'm going pretty fast here,

but this is really just to give you

kind of a snapshot of how these things can work

and obviously more information can be given to you

if you'd like to learn more.

But here we have, we're gonna look

at the covered asset option first

and what the way we're looking at this

is over here on the left,

we have the one economic power strategy, investments only.

We're gonna save up money in investments only products

and by the time we get to retirement age called age 65,

we have a million dollars in here.

Well, the 2.5 to 4.5% rule, which we just talked about,

those withdrawal rates, that'll give us 25 to $45,000

of income every year, not guaranteed.

We don't know if this will actually work out

the way that those withdrawal rate simulations

tell us they will, 'cause they're just simulations.

So over here on the right,

we have the two economic power strategy

and this particular one is called the covered assets option.

And so what we're doing here is instead of let's just say,

let's pretend it's $10,000 a year that you're saving.

Instead of taking all 10,000 in buying investments,

we're gonna split that up

and we're gonna buy 5,000 in investments

and 5,000 in insurance.

By the way, these numbers don't work out exactly like that

but I'm just trying to make an example

that we're gonna split off some of our investment money.

We're gonna buy permanent life insurance,

preferably whole life insurance

with a mutual insurance company.

And by the time we get to age 65,

because we diverted those cash flows,

we have less in investments,

we only have 750,000 instead of the million,

but we also have that one-to-one ratio

of a $750,000 permanent life insurance/death benefit,

because we were buying both of those types of assets.

We were buying accumulation power and distribution power

all along the way up to retirement. Okay?

But even though we have less,

because of the strategy,

we actually can get a higher distribution rate,

a much higher distribution rate by taking this $750,000

and buying an annuity with it,

which is like a pension or Social Security

and it's gonna give us guaranteed income

for as long as we live,

and we'll get a higher distribution rate

than what we can get using the 4% rule

because of the actuarial nature of an annuity.

It uses actuarial science,

which allows it to get a higher distribution

off of the same capital base,

or in this case, a lower capital base.

The reason it's called a covered asset option,

the trade off to this is when you buy an annuity,

you give that entire 750,000 to the insurance company

so that's their money now

in exchange for guaranteed income for the rest of your life

in a higher distribution rate,

but you still gave all that money to the insurance company.

So we call it a covered asset option,

because what we're gonna do

is we're gonna use this guaranteed permanent tax-free

death benefit to cover the value of the investment money

that you turned over so that your family still gets

the $750,000 in death benefit tax free,

and you were able to live on twice as much income,

45,000 to $97,500 a year

compared to 25 to 45 in the investments only.

So you win while you're still alive

by getting more guaranteed income by the way,

and your family wins because they get

a guaranteed death benefit when you pass away.

And by the way, this can be layered

to take into account your spouse.

There's lots of ways to do this,

you don't have to turn over the entire 750,000

and lots of different ways we can do this,

but this is just sort of like the extreme example.

So the second option that we have

is what's called the volatility buffer option.

And this is really set up the same way.

The one economic power approach works exactly the same.

We're gonna save up money

and we're gonna have $1 million by the time we get there,

and that's gonna give us that same 25 to $45,000 a year.

In the two economic power volatility buffer option,

we're gonna do something a little bit different this time.

We're still gonna use the actuarial nature

of life insurance, but this time,

instead of the death benefit,

we're gonna use the cash value

which is just the equity in your whole life insurance policy

is a way to think of that.

And so in this one, we're gonna have that same $750,000

but instead of turning that over to the insurance company

to buy an annuity with it,

we're just gonna leave that invested.

And this way, we don't have to turn over

that entire chunk of cash,

we're gonna let that work in the market,

but in this one, it's called volatility buffer

because what's gonna happen is anytime

there's a downturn in the market,

we're just gonna switch to get income.

So instead of pulling income from our investments,

we're gonna switch over to life insurance cash value

and pull our income from that tax free.

And so we just bounce back and forth

between these two assets, and the reason this works

is because life insurance cash value

is a non-correlated non-market correlated asset.

It does not get affected by market downturns,

and it's always gonna be there, it's guaranteed.

So we just switch over to that in a down market

and that allows our investment accounts to recover

when the market goes back up and not kill off all the shares

that we needed for this to continue to grow.

And so this results in a similar situation

where we can double the distribution rate

from your investment account,

because we know that during a down market,

we're not going to cannibalize the shares that we need,

we're gonna switch over to the cash value.

So if you're on the audio only,

hopefully you're able to follow this so far,

but you can always go again, go to StackLife.com,

hit this it's episode 52

and you can see the video for this in the slides

that I'm sharing right now.

Now, back to the volatility buffer,

what this accomplishes going back

to this distribution rate graph,

if we look at the 4% rule here,

let's look at the 8% rule

where normally, if you only did accumulation power only,

the 8% rule, meaning if you took $80,000 a year

out of that million dollar asset base,

you pretty much have a 0% chance of that working out,

according to the prevailing stats, right?

But if we add in the life insurance volatility buffer,

we see that this 8% rule jumps up to where the 4% rule was.

So these are the same numbers that were run,

the same simulations,

but now we just included the volatility buffer

life insurance cash value volatility buffer,

and those same numbers basically doubled

the distribution rates at the same risk profile, right?

So if you wanted to stay at the 4% rule,

now you're in the 90% success rate

where it's gonna work out, or you can take more income

and have the same risk profile.

The trade off to this one is so you're not giving the money

over to the insurance company to buy an annuity,

but because of that,

this still is not a guaranteed solution

but you have a much better chance of everything working out

because now you have options,

you have different asset classes to go to.

And one of those asset classes at a minimum is guaranteed

in the form of life insurance.

This is kind of an example of what some of this

could look like where we have some different scenarios here,

where in this particular scenario,

this couple, these are just sample scenarios.

They're saving 12% a year,

and everything's going into investment

into the accumulation power investments.

And that 12% a year, which is about $10,000 a year,

that's gonna allow for them to have $70,000 of income

using the 4% rule. Right?

If we go all the way down here,

this slide kind of changes two variables at the same time

which I should update,

but we increase the savings from 12% to 16%

and we also create a one to one balance

of accumulation power to distribution power.

So now, instead of just buying investments,

they're also buying whole life insurance

and we see that the increase in savings

only increase their income by like $10,000 a year,

but when you switch over to the two economic powers,

it basically doubled what they could have gotten

with compared to only accumulation power.

So instead of just getting $80,000,

they're getting $150,000 a year

and 140 of that is guaranteed.

So this is a huge, this is a massive improvement

in retirement income just by having a better strategy

and understanding and having a plan

for the actual distribution part of your retirement.

The thing is it doesn't stop here.

like to, you know, just go Ron Popeil, that's not all,

there's a whole side of this that's not being addressed

and this is where we bring in Infinite Banking.

All right, so what's happening here is if we go back

to this slide comparing the one economic powers

to the two economic powers,

one economic power to two economic powers.

What this is assuming is that

because you're buying whole life insurance,

it's assuming that your investment account

is going to be less, it's gonna be lower, right?

But that's ignoring the fact that life insurance cash value,

if you understand Infinite Banking,

the life insurance cash value that you're accumulating

all along the way during the accumulation phase

of your journey,

that can be used to continue to buy other assets, right?

So here's a big life insurance policy.

So not everybody's gonna have one this big,

but this is $120,000 a year premium,

look at the cash value

that this guy's accumulating over here.

Couldn't this be used, this person's 48 years old,

so he's got almost 20 years to retirement to age 65.

Over that 20 years, couldn't this cash value be used

to buy additional assets all along the way, right?

And so here's a kind of graphical representation

of these two things.

So we have cash flow.

It's gonna get invested over 30, 40 years,

and then you have a retirement account,

here's that $1 million that we talked about.

That's the one economic power approach.

The two economic power approach.

We are diverting some of the money

that's going into retirement accounts

up here to buy life insurance.

But again, going back to the cash value piece of it,

this life insurance can be used to create secondary values

by buying additional assets all along the way

during the accumulation phase of your retirement journey.

And so by the time you actually get to retirement,

you very well may have less in your retirement account,

but you'll have these other assets that you were able to buy

to give you at least the same amount of money

total of retirement assets that you can use to pull from.

So it's not an either/or type of proposition.

We can buy life insurance

and still continue to buy other assets,

preferably income generating assets

that will make our income even better

when we get to retirement

because what we've done is we've created

this permanent life insurance, death benefit,

and cash value over here at the same time, okay.

So that's where Infinite Banking kind of comes into this.

If you're just looking at like a strict retirement plan

kind of strategy, you can build in Infinite Banking.

The other side of it is if you came here

looking for Infinite Banking, well guess what?

All the decisions that you've made in the past,

we can make all of those better too by default,

just by owning some life insurance.

So you're getting kind of two birds with one stone

anytime you're looking at Infinite Banking.

And so that's really all I had from that side of it.

And I don't know if John has any feedback

that he wants to give on that particular piece of it.

- It's a great presentation.

I think the main takeaways for me

is that we're showing people how they can be more efficient

with their dollars as they get closer to retirement

because the generic one size fits all market-based approach,

the really disturbing thing

is as you get closer to retirement,

those dollars are no longer as efficiently

being saved to produce as much income

the closer you get to that retirement end goal.

And so what this system that you presented shows,

it shows us, you know, as we get closer to retirement,

five to 15 years to that retirement day, we can actually...

It goes contrary to how we've been taught to think,

but we can redirect a portion of our retirement dollars

not into the market, but direct a portion of it

into these whole life policies

and it will actually generate more income

and predictable income in retirement.

And so what we've just presented are two additional options

that otherwise would not exist for Joe and Nancy,

you know, soon to be retiree

simply because they've been taken

the all market-based approach

and everything is relying on is predicated

on how is the market gonna perform.

And what happens if the market doesn't perform

for me in retirement like it has

while we were climbing this mountain.

So this is definitely why I think

if you're listening to this episode,

and hopefully you've watched

John Perring's presentation here,

you need to reach out and get a second opinion

because you wanna go into retirement

with as much income as you can possibly get

and you wanna have as much predictability

as you can get as well.

And how are you gonna do that?

By being as efficient as you can

with those dollars that you are gonna save

for your retirement,

you're gonna need need every single last one of 'em.

- Yeah, such a good point.

And you know, if you're in your 50s,

there's a little exercise you could do if you want.

We were talking about this earlier,

take the current value of your account,

don't worry that it's down right now.

Take the current value.

It's not why we're doing this exercise.

Take that current value, get a financial calculator,

put in all the money in the financial

future value calculator,

put all the money you're gonna put in there

over the next however many years till your retirement,

put in an interest rate that you think you're gonna earn

and see what that number looks like.

Then do the same thing,

and just don't put in those future contributions

and use the same interest rate.

I think you'll be a little surprised to find out

that future value number isn't that much different.

And so to John Montoya's point,

the money that you're gonna put into that account

from here forward is gonna have a much lower impact

than what the money that you already put in there

is having on that account.

So you're not really losing anything

by buying a different type of asset class,

one being life insurance to create that distribution power.

There's no like you don't have to have that kind of fear

of missing out, that FOMO that a lot of younger people have.

I mean the younger people, it's incorrect that they have it,

but they still have it.

It really is a powerful tool

that you can use to create significant change

in the outcome of what's gonna happen

with your retirement income.

- And so you mentioned that the presentation

would be available where?

- We're gonna put that on our podcast website,

thefifthedition.com,

and we're right now recording episode 52.

So just take a look for that.

If you're, you know, listening right when it comes out,

it'll just be the first one,

if you're listening sometime in the future,

you'll just look for episode 52,

and we'll just put this whole podcast right on there

and that'll include the slides.

- Awesome.

All right. Well, I think that should do it.

So everyone, thank you for listening to the show,

all your feedback, the messages that you sent us,

we appreciate the compliments,

and certainly enjoy engaging with every one of you.

So please send more of your questions, thoughts,

comments our way at thefifthedition.com.

And we look forward to connecting with you

on the next episode.

- Thanks, everybody. - All right, take care.