Secure Your Retirement with Other People’s Money (OPM)
How to Fund Your Retirement with OPM While Keeping Control and Access to Your Money
Are you absolutely confident about your retirement plans, or do you have some doubts? Imagine if I could show you a way to secure your retirement using an investment-grade life insurance policy that generates double-digit, tax-free returns.
How Leveraging OPM Works
Leveraging OPM in a Simple Way: This strategy starts with you investing $100,000 to create an insurance contract with yearly premiums of $100,000. You then use the cash value of this insurance policy as collateral to secure a $100,000 loan from a bank to pay the premiums. By repeating this process annually for 20 years, with an assumed 5% growth rate and a 3% interest rate on the loan, you can accumulate substantial funds.
By the 20th year, you will have contributed $2,000,000, out of which $100,000 was your own money, and $1,900,000 was borrowed. With the growth and interest, you could potentially have over $3,000,000. This results in a net gain of $113,000 in one year alone, representing a 113% return on investment.
What Does This Look Like During Retirement?
If you contribute $100,000 to the OPM Strategy and the bank matches that contribution every year, starting to take distributions in year 10, here’s what you could expect:
In your first year of distribution (year 10), you could take out $42,000. This amount will steadily increase, and by year 35, you could take out $579,000! The best part? All these distributions are tax-free!
Your Numbers During Retirement
Even after 35 years, the distributions don’t stop. The growth curve continues to get steeper, allowing you to keep taking increasing distributions.
In year 10, when you start taking distributions, your total cash value would be $946,642. Since $784,815 was financed, you would be left with $355,615. By year 35, even after taking $4,525,000 in total distributions, your net cash value will still be $2,057,605.
In year 35, you would have a total of $9,564,225 working for you, which continues to grow through further financing and interest and dividends, allowing you to keep taking increasing distributions.
What About the Death Benefit?
Your life insurance policy offers an impressive 23.0% annual return, turning $100,000 into $4,525,000. Additionally, your premiums not only fund a death benefit for your heirs but also grow over time, surpassing your cash value.
When you pass away, the death benefit pays off any outstanding loans and interest, leaving a tax-free sum for your heirs. Here are the accrued death benefit amounts on day 1, year 10, and year 35, after repaying any financing:
This strategy allows you to leverage other people’s money to secure a comfortable and prosperous retirement, all while maintaining control and access to your funds whenever you need them.
