A 53-year-old man is sitting on a $2.5M qualified plan. He has two choices for what happens next. Both are reasonable. Only one is structured. Here is what each one actually produces — in plain numbers.
The simplest move is to do nothing different. Let the $2.5M keep growing inside the qualified plan and draw an income from it in retirement. Here is that path, assuming the market behaves and tax rates never rise.
*Only if the market never delivers a bad run of returns and taxes never go up. A single rough sequence early in retirement, or a higher tax bracket, and the money runs dry well before 94.
This is the part that sounds complicated and isn't. Premium finance simply means a bank lends most of the money needed to fund a large structure, so you don't have to write the whole check yourself. The structure grows. Once it has grown enough, the bank gets paid back in full — and the asset is yours.
Instead of dragging tax across decades, he settles up front and uses leverage to fund a far larger asset. The premium needed is $8M — but he never writes an $8M check. Three funding streams cover it:
More income. Untaxable. That doesn't run out — plus more than double the legacy — for a third of the tax.
For informational purposes only. These figures illustrate a concept and have no bearing on any real, individual result. They do not apply to any person of the same age or values, and are not a projection, offer, or guarantee. To see numbers built for your own situation, we can run them.