Before You Buy! The Truth About "Be Your Own Bank" in Retirement

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Have you heard the pitch: “Use whole life insurance, borrow tax-free, and be your own bank”? In this episode of The Perfect Retirement Plan?, Phillip Smith of Tidepool Wealth Strategies breaks down the truth behind the “infinite banking” trend and what it really means for people about to retire or recently retired.

Learn how policy loans actually work, why early costs and commissions can drain returns, and how missteps can trigger taxable income right when you need retirement cash flow. You’ll also hear when this strategy might make sense, when it definitely doesn’t, and which tax-smart retirement planning alternatives offer more flexibility—like Roth conversions, brokerage savings, and straightforward life insurance for protection instead of profit.

If you’re searching “infinite banking explained,” “whole life vs Roth IRA,” or “be your own bank pros and cons,” this episode helps you see through the hype and keep more control over your financial future.

Chapters

00:00 Intro – The real meaning of “be your own bank”
01:12 Why this pitch appeals to pre-retirees
02:45 How whole-life policies really generate cash value
04:36 The hidden costs: commissions, loan interest, and liquidity limits
06:02 Tax traps: loans, lapses, and Modified Endowment Contracts (MECs)
08:17 Who this strategy can work for – and who should avoid it
10:01 Better alternatives: Roth conversions and flexible accounts
11:48 Key takeaways and action steps before you buy

Action Step:
Before signing anything, review the real costs, ask for a detailed illustration, and compare it to a Roth IRA or brokerage strategy inside your retirement plan.

Explore more insights at TidepoolWealth.com and watch related videos on our YouTube channel @TidepoolWealth for guidance tailored to professionals nearing retirement in the Pacific Northwest.

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Thanks for tuning in to this episode of The Perfect Retirement Plan, and remember: it's not about having the smartest financial advisor, the most money saved, or the highest probability of retirement success. The perfect retirement plan, for you – is the one you act on.

Phillip Smith, CRPC AIF | Financial Planner
Tidepool Wealth Strategies
450 Country Club Road, Suite 350 | Eugene, OR | 97401

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Additional Disclosures:
The opinions contained in this material are those of the author, and not a recommendation or solicitation to buy or sell investment products. This information is from sources believed to be reliable, but Cetera Wealth Services, LLC cannot guarantee or represent that it is accurate or complete.
All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.