FlexVault Income Planning
Tax-Free Retirement Income From Year 3
Create predictable, tax-free retirement income on YOUR timeline—not the IRS's. FlexVault delivers income flexibility traditional retirement accounts can't match. Income is available as early as Year 3—dramatically faster than traditional IUL (Year 10-15). Income comes through tax-free policy loans under Section 7702. No RMDs, no early withdrawal penalties, no IRS contribution limits.
FlexVault Income Planning Benefits
At a Glance
Income Start
Year 3 (vs. Year 10-15)
Tax Treatment
100% Tax-FREE
RMDs
None
Early Access Penalty
None
Income Flexibility
Full Control
Legal Basis
Section 7702
From Investment to Tax-Free Cash Flow
The FlexVault Income Timeline
Phase 1: Investment (Years 1-2)
Fund your FlexVault policy with premiums designed for rapid cash value growth. The four-component system begins working immediately—but income isn't the focus yet.
Phase 2: Breakeven (Year 3)
This is where FlexVault diverges from traditional IUL. By Year 3, the four-component returns have offset policy costs. Income becomes available—if you need it.
Traditional IUL? Still 7-12 years away from breakeven.
Phase 3: Building (Years 4-9)
Income is available but growth is prioritized. Cash value continues accelerating through the four-component system. Taking income now is possible, but letting it compound maximizes future income potential.
Phase 4: Income Generation (Year 10+)
Significant tax-free income begins. On a $100K/year premium policy, expect approximately $38,574 annual tax-free income starting Year 10—growing each year as cash value continues to compound.
Phase 5: Maximum Income (Year 35+)
Full optimization. Premium payments can stop entirely. Maximum income achieved—approximately $248,538/year on the $100K premium example. Substantial death benefit maintained for legacy transfer.
*Based on $100K/year premium. Your results will vary based on funding level and policy design.
Why Timing Matters
FlexVault vs. Traditional IUL Income
| Feature | Traditional IUL | FlexVault |
|---|---|---|
| First Income Possible | Year 10-15 | Year 3 |
| Breakeven Point | Year 10-15 | Year 3 |
| Income Control | Limited flexibility | Full flexibility |
| RMDs | N/A | None |
| Tax Treatment | Tax-free loans | Tax-free loans |
| Income Growth | Slow | Accelerated |
Control Your Retirement, Not the IRS
FlexVault vs. 401K Income
| Feature | 401K/IRA | FlexVault |
|---|---|---|
| Contribution Limits | $23,500/year (2025) | No IRS limits |
| Tax on Withdrawals | Fully taxable | Tax-FREE |
| RMDs at 73 | Required | None |
| Early Access Penalty | 10% before 59½ | None |
| Income Control | IRS-mandated minimums | You decide |
| Tax Rate Risk | Full exposure | Zero |
The 401K Tax Time Bomb
Every dollar in your 401K will be taxed at your future tax rate—which could be significantly higher than today. With $39+ trillion in national debt and $169 trillion in unfunded liabilities, tax rates are far more likely to rise than fall.
FlexVault income is tax-FREE. It doesn't matter what future tax rates are—you pay nothing. That's not a loophole. It's Section 7702 of the tax code, established law since 1984.
Your Money, Your Rules
Income Flexibility Features
No RMDs
Unlike 401Ks and traditional IRAs, FlexVault never forces you to take distributions. Keep your money growing as long as you want.
Variable Income
Need more income one year, less the next? Adjust as needed. Take $50K one year, $100K the next. You're in control.
No Early Access Penalties
Need funds before 59½? No 10% penalty like retirement accounts. FlexVault provides liquidity when life happens.
Tax-Efficient Timing
Coordinate FlexVault income with other income sources for optimal tax planning. Strategic guidance helps optimize timing.
The Section 7702 Mechanism
How Tax-Free Income Works
FlexVault income comes through policy loans, not withdrawals. This is the key distinction that makes the income tax-free.
Why Loans Aren't Taxable
- Loans are borrowed money—not income you earned
- Your cash value serves as collateral
- The loan is "repaid" by the death benefit when you pass
- No taxable event ever occurs during your lifetime
The Section 7702 Protection
This isn't a gray area or aggressive tax planning. Section 7702 of the Internal Revenue Code explicitly defines this treatment. It's been law since 1984 and has survived multiple administrations and tax code revisions.
Planning Your Tax-Free Future
Common Questions About FlexVault Income
Ready to Plan Your Tax-Free Income?
In a complimentary FlexVault Strategy Session, we'll project your specific income timeline and show you how much tax-free income your situation could generate.