All right. We’re going to be talking about SMART Retirement. I’m nowhere close to retiring, kind of, I’m 36. So, as far as the United States is, I’m nowhere close to retiring. I was looking through this a little bit and I was trying to find the third report and the date. It goes through the first two, but what we’re going to… Let me just show you some of the chapters that they got here, right? The world is changing. Are you? I can’t even read it off the thing. The truth about misleading financial math banks and wall street use using debt and cash, or debt and float to gain financial freedom, my personal SMART plan, SMART people SMART plans, higher income without taxation, understanding the capital equipment of different assets. I’m quite interested in that one. I’m also interested in what is it planning for it to set the more important than the client?
I like that one too, don’t get me wrong, but I’m more interested right now is 73, higher income without taxation because I’m not making as much money as I want to right now. So, I might as well learn what to do before I make all the money so I don’t have to pay the taxes while I learn, right? Let’s first kind of see if we can scan through what page was that again? 73. See if we can scan through this, the crucial dates a lot where they’re already past the States that changed the face of future in American retirement system forever. They’re already passed there. However, the population is aging, the number of workers for social security retirees is falling. Okay.
Either which way the three most important dates were this, 2008 to ’11 and ’16 for the social security. So basically, I mean, I didn’t read it, but it was kind of more or less saying that in 2008 is when the first baby boomers could accept it. In 2011, they turned 65. By 2016 they basically were age 70 and that’s full of benefits. So, all baby boomers unless you’re rich or almost looking for debt, right? So, I don’t want to talk about all that. Just think about that’s a lot of people that are now depending on the government. Let’s go to 73. So we, as a younger generation can pay for our own retirement. 73.
All right. Chapter five, SMART people, SMART plans. Scan through here a little bit. Why high cash value life bankers retire rich from their SERPs.
All right. For many people, the income available when sticking to the standard deduction simply isn’t enough to live the lifestyle they want to live based on the wealth they’ve accumulated. Of course I’ve written in this book. They understand that trying to take more out of their tax qualified and pretax retirement plans isn’t really going to substantially increase the style of living so much as the SERPs substantially increase their annual tax bill. So, what’s it retired to do? Why not take a look at a 100+ year old product that banks and billionaires can’t get enough of? All right. The high cash value, low death benefit, life insurance specifically for me, it’s 10 Pay.
Okay. Why whole life insurance? Cash accumulated is assessable as tax preferred income. No contribution limitations, no income cap limitations, no provisional income safe Harbor for alleged legislative change in 82, 84 and 88. Benefits paid to family are tax preferred. Waiver of contributions is disabled and benefits for chronic care and terminal illness. All right, let’s dive in to what he’s talking about here just a little bit. A 10 Pay life insurance policy is called a limited pay life insurance policy. Okay. It offers a lifetime of policy benefits after a set term of premium deposits in this case 10 years. Depending on the type of coverage you choose the policy can simply stay in force after 10 full premium payments are made on a guaranteed and paid up basis. While the payments are stretched out over a certain term, this is not a life term policy.
It’s a high cash value, low death benefit policy offering a lifetime of benefits. This means that the death benefits are payable even if the issued passes away 30 years after they stopped making premium payments. Okay. It also means that the policy accrues significant cash value which means you have access to cash that you can know that you should use to make major purchases, replace bank financing, and ultimately distribute money in your retirement via structured loans and that’s without taxation.
With the freedom this offers you, you can avoid using credit cards with their expensive interest rates and become your own bank, financing your own residents and vacation homes without the tricky math used by traditional bank lenders. All right, I’m starting to kind of understanding this, but not quite. You might be wondering why I’m talking about 10 Pay insurance after bringing up the issue of income shortages for retirees. Here’s the thing with it, right? 10 Pay policy you’re occurring significant cash that you can access after you’re retired. That accumulated cash is always available to you when you take it out and you can do so without any tax ramifications, it isn’t counted as provisional income. So, it doesn’t offset your social security and trigger taxation and it isn’t itself taxable.
It’s a little bit more than what I know, because I don’t know what a 10 Pay plan is, but it’s triggering my interest. Let’s see, there are also no contribution limits other than your ability to afford paying the premiums, which is easy if you dollar cost average, a less tax efficient asset into the 10 Pay over that 10 year period. There are no income limitations, no required minimum distributions and no conversions required. Ultimately, what I’m saying is that with a 10 Pay life insurance policy, you never have to worry about the income you’re taking out because it’s not going to trigger a tax if you keep the contract in force. There is simply no 1099 or other tax reporting.
All right. I’m going to look more into it, but he has nice little fixtures or figures and pictures. So, let me see if as of 200 of JP Morgan has had 10 million bank owns Merrill Lynch had 20 billion [inaudible 00:08:04] had 7 billion. These are huge amounts of money that have high cash by insurance based products. Let’s take a look at an individual example. Bank America’s CEO, Ken Lewis is guaranteed to get 3 million a year as an annual retirement benefit beginning at age 60. How do you think Bank of America plans on fulfilling the promise of those benefits? Where they’re going to use what Bank of America refers to in their annual statement as a SERP, that stands for Supplemental Executive Retirement Plan. The SERP is not the company 401k or defined benefit pension plan, it’s a special plan for their most senior executives.
Their SERPs, okay. So, they’re going to screw everybody out of a retirement, but they got a whole entire fund for their special people, right? On the corporate end, they showed 53 million in Ken’s SERP. What is that really? It’s a high cash value life insurance policy. That’s what they’re using to ensure that they’re able to make good when Ken uses is 3.4 million a year special pension. Let’s think about that for a second. The big boss of Merrill Lynch, who would love to manage your retirement for you, who guaranteed 3.8 million a year from a 53 million cash value life insurance policy back in ’10 that’s… Yeah, I’m going to have to explain this a little bit more.
Because I mean, a lot of these people were doing it and we got Coca Cola. We got Boeing, AT&T, IBM, Lockheed Martin. So, it’s almost like every single one of these big boy companies are doing this. So, we can figure it out how because I got to cut it because we’re out time, but I’m very interested to learn more about this.
I might read a little bit before the chapter, a little after a chapter, depending on how motivated I am, but I mean, that’s pretty interesting. Like I said, I got 22 years or 24 years before I’m 60. Silver 23 years. So, I guess it’s good to know now and start building because if I don’t have to pay taxes after I’m paid at 63, and this is a much more efficient way of attaining money or wealth, opposed to my 401k or whatever that I’m going to be taxed on. That’s good to know. And that concludes box number what was it? Five. So, we got the SMART Retirement. We’ve got The Presidency, Storm in a Teacup, Mr. Benjamin Franklin.
Padua and the Tudors and Among Heroes. So yeah, that is box number five. Don’t forget somewhere around if you look hard enough, you will find that you can buy your own boxes and you can create your own library and do what I’m doing and look through each book. But no, I mean words, I mean, seriously, you don’t have to do right what I’m doing because this is a massive project, but just being able to have your own library, it’s very interesting. And that’s part of the reason I’m doing it is just to show everybody that a random box of books is actually quite interesting and you never know what you’re going to get. Kind of like Forrest Gump, life’s like a box chocolates.