Future-Proof Your Financial Freedom: The Power of the Stream Protection Plan in Uncertain Times
When can I retire, and how much money do I need? Retirement should be about adventure-seeking, meaningful moments with loved ones, and spending every day lazing about in leisure wear if you so wish, right? It shouldn’t be about worrying how much of your hard-earned cash you’ll lose to tax.
Stream has developed an innovative approach to growing and securing your wealth for not only your golden years, but also today. Here, Stream co-founders Niclole Rex and Tim Whitmore share insights on how they’re taking what the wealthy are already doing with a premium financed life insurance model and making it accessible to you.
What Is Premium Financed Life Insurance?
Let’s start with what it’s not. It’s not (just) an expense that you and your family benefit from when you die. Sure, it can be that. But it can also be so much more. Enter the Stream Plan.
As Tim explains, “Simply put, it’s a way to save for tax-free retirement income with no market risk, all by using somebody else’s money. And we know that’s a smarter way to save,” says Tim.
Diving a little deeper, Stream’s premium financed life insurance allows you to hyperfund a policy using leverage (aka the bank’s money) with a 5:1 ratio. This way, you’re able to use bank leverage to increase the policy’s growth while creating flexibility to use money for life events or in the unfortunate case of chronic illness, or have it as a death benefit. The best part? There’s no inherent risk to you, the client, because Stream is the borrower. You’ll never lose what you put in.
What are the benefits of the Stream Protection Plan?
As Nicole puts it, it’s all about avoiding the vulnerability of the US’s economic uncertainty.
“The National Debt levels in America are skyrocketing. And how do you think they’re going to reduce that? By continuing to raise the tax rates,” says Nicole.
The Stream Plan takes your current after-tax dollars, puts them in a tax-benefited vehicle – life insurance – generating tax-free growth and tax-free income. It’s flipping life insurance from being a liability to being an asset.
But how is Stream Protection Plan income taxed vs a 401(k)?
The main risks with retirement finances are longevity, market performance and tax rises. As Tim explains, there’s a false sense of security with traditional methods.
“So, I take my pre-tax money from my employer and put it in an investment vehicle to have X dollars when I retire at 65. Let’s say I’m projected to have one million dollars. Clients think they’re going to have one million dollars at retirement. They’re not. The government’s going to tax that. If my tax bracket right now is 40%. I only have six hundred thousand dollars,” says Tim.
Zero floor means peace of mind when the market drops
A fluctuating market can significantly affect retirement returns. With regular retirement plans, if the market’s down by 30%, so is your investment. The benefit of Stream’s Plan is that it’s tax-free and protects you from market unpredictability with a 0% floor. What does this mean? Tim explains that you’ll never be in the negative.
“We’ve experienced several cycles over the last 30 years,” says Tim. “All of a sudden, that half a million dollars in a 401(k) or IRA dropped to two hundred and fifty thousand dollars, and then it takes years just to recover back to where you were,” he says.
“With Stream, if the market’s down, you’ll get credited zero or 1%, depending on the life insurance carrier used with the program. Whereas, 401(k) or IRA are at risk of unlimited losses. Here, you’ll never have less than you put in. It’s a product that provides you with security in uncertain times,” Tim says.
The wealthy have been using this model for years. Now you can, too
Leveraged life insurance is not a new concept. Ultra-high-net-worth individuals with wealth to build on have access to additional bank money to continue generating wealth. But it’s generally required to have a net worth of 10 million dollars or above. Nicole’s frustration over this unfair imbalance fueled the idea for the Stream Plan.
“This is what I’m passionate about. We’ve figured out a way to make this model accessible for all, so there’s a lower entry point,” says Nicole. “While you do need to have a reasonably high income, what we call ‘HENRYs’ – high-income earners, not rich yet – to enter a Stream Plan, it’s much lower, about ten times lower, than it has historically been.”
To enter a Stream Plan, you need:
- single and earn $200k annually; or
- married and earn $300k annually; or
- you have investable assets exceeding $1million; and
- you can contribute at least $5k annually for 5 years.
The Stream Plan is a community-minded model
As the saying goes, there’s power in numbers, right? If you go to a bank as an individual and want to borrow fifty thousand dollars against your policy, they’ll slap you with a super-high rate. But if you join forces with ten friends, that’s five hundred thousand dollars, and suddenly, you’re attracting much lower rates. Tim and Nicole point out that the Stream Plan’s community-minded ethos is creating better opportunities for individuals.
“You could think of it like crowdfunding,” says Tim. “Each tranche has between five to 12 people.”
Nicole notes that the beauty of this structure is that it takes five-to-12 HENRYs and creates one pseudo-wealthy individual.
Protecting what matters most
What if you get sick, are injured, or pass away unexpectedly? The Stream’s premium financed life insurance, nicknamed the Swiss army knife solution for its multifaceted uses, covers these scenarios and is modeled to protect your family.
“People think of life insurance as you have to die to benefit from it. That’s not the case with our Stream Plan,” says Nicole. “If you’re the income earner and fall ill, you can advance the death benefit. But if you die, your beneficiary receives the tax-free death benefit.”
Are you concerned about creditors? The Stream Plan is also a remote entity that protects your money in the unfortunate event of bankruptcy or divorce.
Let’s sum up the Stream Plan:
- Minimal Financial Entry: Clients contribute a minimum of $5k annually for five years.
- Tax-Free Retirement: Secure a tax-free retirement income with no market risk.
- Zero Percent Floor: Your investment never drops below its initial value.
- Comprehensive Coverage: Protects against illness, injury, and death, offering a Swiss army knife-like solution.
- Enhanced Borrowing Power: Flexible approach for younger, high-earning individuals.
Traditionally, life insurance has been viewed as a liability – a necessary expense to cover potential future losses once you’re gone. The Stream Plan instead takes a modern, progressive, and power-in-numbers leverage approach to growing, protecting, and providing, transforming it into a valuable asset.
As Tim puts it, “Would you rather pay tax on the seed or the harvest?”
