The Retirement Income Ladder
A, B, C policies with staggered anniversaries for smoother draws and timing risk control.
Product identification: this page discusses participating whole life insurance. It is insurance, not a bank account or investment.
We are not a bank: “The Infinite Banker” is an education brand. We do not accept deposits, and we do not offer FDIC- or NCUA-insured products.
Guaranteed vs non-guaranteed: dividends and other non-guaranteed elements are not guaranteed and may change. Any values shown that include non-guaranteed elements are for education only.
Why One Policy Isn’t Optimal for Retirement
Most people think about whole life insurance as a single policy. Fund it for decades, then take loans or withdrawals in retirement. That works, but it’s not optimized.
The problem with a single policy:
Timing risk: All your dividends hit on one anniversary date. If the dividend rate drops that year, your entire system takes the hit at once.
Liquidity timing: All your loan capacity resets on one date. If you need access in month 11, you wait.
Inflexibility: Can’t easily tune distributions across multiple years without complex calculations.
The solution: multiple policies with staggered start dates.
The A-B-C Structure
Instead of one $100,000/year policy, you design three policies:
Policy A: $40,000/year, anniversary in January
Policy B: $30,000/year, anniversary in May
Policy C: $30,000/year, anniversary in September
Total funding remains the same ($100,000/year), but now you have:
Quarterly liquidity access: As each policy anniversary passes, fresh dividend credits and increased loan capacity.
Diversified dividend exposure: Three different anniversary dates mean you’re not fully exposed to any single year’s dividend environment.
Flexible draw timing: Need $50,000 in March? Pull from Policy A (just reset in January) and Policy B (about to reset in May). Need another $50,000 in October? Use Policy C (just reset) and let A/B keep compounding.
How It Works in Retirement
Let’s say you’re 60 and ready to start supplemental retirement income. Your three policies have matured:
Policy A: $800,000 cash value, January anniversary
Policy B: $600,000 cash value, May anniversary
Policy C: $600,000 cash value, September anniversary
Total system: $2,000,000 cash value.
Annual retirement need: $80,000 supplemental income.
Traditional single-policy approach:
Take $80,000 loan in January
Wait another full year for next draw
Rinse and repeat
Staggered A-B-C approach:
January: Take $27,000 from Policy A
May: Take $27,000 from Policy B
September: Take $26,000 from Policy C
Total: $80,000 spread across the year
Why this is better:
Smoother cashflow: Quarterly distributions instead of annual lump.
Timing flexibility: Adjust each draw based on actual needs. Higher healthcare costs in Q2? Take more from Policy B.
Dividend capture: Each policy has had fresh dividends credited before you tap it. You’re not borrowing right before dividend season.
Lower loan drag: Spreading draws across three policies means each individual policy carries less loan burden relative to cash value.
Building the Ladder Over Time
You don’t need to start with three policies on day one. Many clients build the ladder progressively:
Year 1: Launch Policy A with significant funding
Year 3: Add Policy B once cash flow stabilizes
Year 5: Add Policy C to complete the structure
By staggering the start dates, you also stagger the maturity curves. Policy A has a two-year head start on Policy B, which has a two-year head start on Policy C. In retirement, Policy A carries the heaviest load while B and C provide flexibility and backup.
The Four-Policy or Five-Policy Option
Some high earners extend this further:
Four policies: Quarterly anniversaries (Jan, Apr, Jul, Oct)
Five policies: Every 2 to 3 months
This creates even smoother liquidity and more granular control. But it also adds administrative overhead. We usually recommend stopping at three or four unless you’re managing $500,000+ annual funding.
Staggering Across Family Members
Another approach: policies on different family members with staggered dates.
Dad’s policy: January
Mom’s policy: May
Child 1’s policy: September
Same laddering benefit, but now you’re also building wealth transfer and legacy across the family. Each policy serves dual purpose: retirement income tool and estate asset.
Tax and Distribution Planning
When taking retirement income, you control the tax character:
Loans: Tax-free access, interest accrues, no 1099
Withdrawals: Up to basis is tax-free, gains are taxable
Most clients use loans and never repay. The death benefit settles the loan at death, and heirs receive the net death benefit tax-free. But having three policies gives you options:
Withdraw from one policy up to basis
Loan from another policy
Let the third keep growing untouched
Your CPA will love the flexibility.
Real Client Case
Client: Age 50, $250,000/year funding capacity, 15-year horizon to retirement.
Structure:
Policy A: $100,000/year (started age 50)
Policy B: $75,000/year (started age 52)
Policy C: $75,000/year (started age 54)
At age 65:
Policy A: 15 years funded, $1.8M cash value
Policy B: 13 years funded, $1.3M cash value
Policy C: 11 years funded, $1.1M cash value
Total: $4.2M system
Retirement draw:
$140,000/year needed (3.3% of total system)
Spread across quarterly draws from A, B, C
Sustainable indefinitely with dividend support
This client has a private pension fund that no employer or government can touch.
Steps to Build Your Ladder
Determine total annual funding capacity
Decide on 2, 3, or 4 policies based on complexity tolerance
Allocate funding across policies (usually weighted toward first policy)
Stagger start dates by 3 to 6 months
Fund consistently across all policies
Rebalance if needed by adjusting PUA contributions
Enter retirement with a laddered distribution system
Why This Matters
Retirement isn’t a single event on a single date. It’s a 20 to 30 year phase with variable needs, market conditions, and health situations. A staggered policy structure gives you the tools to navigate all of it without ever being locked into a rigid timeline.
This system works best for high earners with existing liquidity and the capacity to fund meaningfully each month. If that’s you, complete intake and book your Discovery call.
Invitation to inquire: The information provided is an invitation to inquire about our services and is not an offer to sell insurance or securities. Renewal, cancellation, termination: Policies require ongoing premium payments. Non-payment may result in lapse or termination. Surrendering a policy may result in fees and tax consequences. Licensing scope: We are licensed insurance professionals. We do not provide legal, tax, or investment advice. Consult your advisors. Loans reduce cash value and death benefit: Outstanding loans and interest reduce available cash value and death benefit. Loans are not required to be repaid during the insured’s lifetime, but unpaid loans will reduce death benefit. Comparisons are educational: Any comparisons to other financial products are for educational purposes only and are not guarantees of performance. “Infinite Banking Concept®” is a registered trademark of Infinite Banking Concepts, LLC. The Infinite Banker is independent: We are not affiliated with or endorsed by Infinite Banking Concepts, LLC.
