Personal Finance Blog for Retirement and Investment Advice

Can You Put a Lump Sum into a Bank On Yourself Plan?

This is the fifth installment in our series of answers to the most-asked questions we got on our recent “Ask the Bank On Yourself Advisors” online event.

This question is about whether you can pay a larger amount of premium into a Bank On Yourself policy in the early years, to supercharge the growth.

The answer is “yes,” and the big advantage is that it allows you faster access to a higher amount of cash value that you can use for a variety of purposes.

Here are three common situations where people do “lump sum” funding of their plans…

Situation #1: Debt Consolidation

The Bank On Yourself Authorized Advisors may help a client to “front load” a policy in order to help them pay off high-interest-rate debt.

This typically involves repositioning other assets the client has into a Bank On Yourself policy, so they can turn around and pay off debt they owe to outside financial institutions.

The benefits of transferring a debt to your Bank On Yourself plan are numerous and include:

  • Swap out high-interest compounded rates for simple, low interest rates
  • Recapture interest into your policy that you would otherwise pay and never see again
  • The money in your plan continues growing as though you never touched a dime of it (if your policy is from one of a handful of life insurance companies that offers this feature)
  • You can pay back your loans on your own schedule, which gives you great flexibility when the proverbial you-know-what hits the fan. You can reduce or skip some loan repayments without having to worry about black marks on your credit report, collection calls or a goon squad showing up to repossess your stuff
  • You can get access to 85-90% of your cash value when you want or need it, for any reason, with no questions asked, no nosey applications to fill out, no pledging your first born and no begging!

To learn more about how this works, check out our Consumers Guide to Bank On Yourself Policy Loans here.

Situation #2: A Better Place for Your “Safe Money”

Some people have relatively large amounts of money they consider their “safe money” or rainy-day money in savings or money market accounts or CD’s, or even bonds, that are currently paying interest rates so low you practically need a magnifying glass to see them.

Moving some of your safe money into a Bank On Yourself policy gives you many advantages, including…

  • Guaranteed, predictable growth that is many times higher over the long term than what conventional safe money vehicles pay
  • Tax-deferred growth
  • Tax-free distributions, under current tax law
  • No market risk or losses
  • Flexibility and Control – you have access to your money with no government restrictions or penalties. (Have you ever noticed how 401(k)’s, IRA’s and other government-sponsored retirement plans have more strings attached to them than a puppet?)
  • Income tax-free death benefit for your loved ones
  • Your policy is guaranteed to grow by a larger dollar amount every single year you have it

Situation #3: Fund a College Education Without Sacrificing Your Own Retirement Savings

Another reason to “overfund” a Bank On Yourself policy is to pay for a college education. This has many advantages over the conventional approaches to saving for college, such as 529 Plans, UGMA’s and UTMA’s, and student or parent loans.

The advantages of financing a college education through a Bank On Yourself plan include:

  • You control how the money is used
  • You avoid having the money count against you when applying for federal student aid
  • The growth of your money is guaranteed
  • Your plan can finish funding itself if you pass away

To see examples of how Bank On Yourself can be used to pay for college without going broke, check out this video and transcript.

These are just a couple examples of why “overfunding” or putting a lump sum into a policy in the early years makes sense.

IMPORTANT: No two Bank On Yourself policies are alike!

Each one is custom tailored to the client’s unique situation and goals. To find out what your numbers and results could be if you added the Bank On Yourself method to your financial plan, request your FREE Analysis and referral to one of the Bank On Yourself Authorized Advisors (if you haven’t already done so).
Request a FREE Bank on Yourself Analysis
Keep in mind that the only regret most people say they have about Bank On Yourself is that they didn’t start sooner, so don’t dilly-dally! There’s no cost and no obligation and no arm-twisting! You’ll know in advance your bottom-line guaranteed numbers and results before you even decide to move forward with your plan.

Is it Too Late? Am I Too Old to Benefit from Bank On Yourself?

One of the most-asked questions we got on our recent “Ask the Bank On Yourself Advisors” live online event was when is it “too late” to start a Bank On Yourself plan?

A number of people said things like…

I’m only 10 years away from retiring. Can I still benefit from this?”

In most cases, the answer is “yes.” In fact, one of the Advisors who presented during the event walked us through a case study of a couple who became Bank On Yourself policy owners at the ages of 59 and 60.

Happy Retirement

Is it too late for a comfortable retirement?

I started my own biggest plan yet last year when I was 61. (Oops! I just gave away my age!) And people older than I start new Bank On Yourself plans, as well.

The Bank On Yourself Authorized Advisors are masters at structuring plans to meet their clients’ unique situation and goals – and they have a LOT of flexibility in plan design.

But there’s also a different kind of Bank On Yourself dividend-paying whole life insurance policy that I call a “Bank On Yourself for Seniors plan.”

This involves a one-time lump-sum premium payment, and then you pay no more premiums – ever.

These plans are available for people up to age 85, and even come with a FREE long-term care benefit for stays in a long-term care facility or for home health care, in most states. [Read more…]

Can you Roll Over your 401(k) or IRA into a Bank On Yourself Plan?

One of the most-asked questions we got on last week’s “Ask a Bank On Yourself Advisor” live online event was…

“Can I roll over funds from my 401(k)/IRA/403(b)/TSA into a Bank On Yourself plan – and what are the tax consequences?”

This is actually a common method people use to fund a Bank On Yourself plan.

Here’s how a retirement plan rollover works…

[Read more…]

How Sequence of Return Risk Can Devastate Your Retirement Lifestyle

There are three words that could have the biggest impact on whether you enjoy a comfortable retirement… or you have to struggle and forego life’s luxuries – and even life’s necessities.

But almost no one is talking about these three words. And there’s a good chance you’ve never even heard of them.

These three words could have more impact on your retirement lifestyle than living longer than you expected… or than being forced to retire sooner than you planned (which happens to nearly 50% of Americans, according to the Employee Benefit Research Institute).

The three words may sound a little technical, but I’m going to make them brain-dead simple to understand. [Read more…]

Slacker’s Guide to Goal Setting

Many of us spend half our time wishing for things we could have if we didn’t spend half our time wishing.”
– Alexander Woollcott

It’s still early in the year and time to set our bright and shiny new goals for the next twelve months, often with the grand title of “New Year’s Resolutions.”

Give me a break!

Aren’t we busy and stressed enough just trying to keep up with where and what we are without the added effort of trying to make our lives better? Why waste our time going after goals when we can put our feet up and watch new episodes of The Good Wife?

Besides, if we set goals, our lives might actually change – and who likes change? We’re all comfy cozy with our current problems and headaches. Why rock the boat?

However, you might be surrounded by obnoxiously chipper goal setters and goal getters harassing you to join them. Ugh!

To keep them off your back so you can join that happy 40% of people who set New Year’s Resolutions and fail within the first month, I’ve come up with some sure-fire tips:

The Slacker’s Guide to Goal Setting

Follow these pointers and you’ll never, ever have to worry about goals mucking up your perfect life! [Read more…]

Expert Interview: Cultivating an Attitude of Gratitude

Did you know there is scientific evidence that gratitude can lower your blood pressure, improve your digestion, reduce your stress and boost your immune system?

And it can have an amazing impact on how you respond to events, people and situations… and how they in turn respond to you.

The wonderful thing is that it can be cultivated and nurtured.  Result:  You bring out the very best in yourself and your life and the best in those whom you love, work and play with.

Buy Catherine Price's book, Gratitude: A NovelIn my 30-minute interview with best-selling author Catherine Price, you’ll discover some practical tips for cultivating an attitude of gratitude – and multiplying your blessings.

Catherine is the author of Gratitude: A Journal (available here on our Amazon store).  It’s a perennial best-seller that gives you a great way to keep a daily record of life’s little blessings, and it’s filled with a year’s worth of insights, prompts and inspiring quotes. [Read more…]

How to Raise Financially Savvy Kids, Teens and Grandkids

Welcome to part three of our Your Money Revolution video training series.

I hope you enjoyed the first two installments on how to spend less without feeling deprived, and “the silent enemy” in your retirement account that could be costing you hundreds of thousands of dollars in stealth fees.

And thank you for all your notes and emails on how much you enjoyed them!

Today, we’re going to talk about one of the biggest money drains on the planet… our children.

Do your kids think money grows on trees? Are you tired of saying “no” to the constant requests for the latest “must have” electronics, gadgets, sneakers, and more? I’ve been hearing for years from readers who say this is a big challenge they face.

If you can relate, you’re going to love this 5-minute video clip that reveals two of eight key money lessons we cover in the Your Money Revolution course that will empower your kids (and grandkids) to be financially responsible for life. [Read more…]

The Secret to Living a Richer Lifestyle while Spending Less [Video]

We had such a great response to the video clip from my new Your Money Revolution financial transformation program I posted a few days ago that I just couldn’t resist giving you another one.

The first clip showed you how the fees charged even by supposedly low-cost mutual funds and ETF’s can devour up to 37% of your account value – and what to look out for.

Today’s video clip will give you an idea of the wide range of strategies and tools we provide you in the Your Money Revolution coaching program for taking back control of your money and finances.

This video clip is less than 5 minutes and shows you one of a dozen ways we cover for spending less – without feeling deprived. In fact, you’ll experience a much deeper level of happiness and contentment. [Read more…]

Your Money Revolution Video Clip: How Mutual Fund Fees are Devouring Your Savings

For the past year, I’ve been working full-time on creating a comprehensive go-at-your-own-pace coaching program designed to eliminate your biggest money worries – and let you take back control of your financial destiny.

I call it “Your Money Revolution,” and initial response to the program has been terrific.

Today I’m excited to share a 5-minute excerpt from this new program with my loyal subscribers.

I want you to be able to see for yourself how truly life changing the information, tools and strategies that I’ve packed into this program can be.

This 5-minute video excerpt deals with how the fees you’re paying in the mutual funds or ETF’s you own in a retirement or investment account may be draining far more of your account value than you realize. [Read more…]