770 plans – a Scam?


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Thank you for your comments regarding the IRS 7702 tax regulation. It has caused me to think about the discussion and write down some remarks to consider.

First what is the IRS code (like 7702(a) or 401(k))? It dictates how an entity can legally structure a tax return or a tax qualified savings account, etc. So it is the law.

What is a Whole Life or Permanent life insurance? It is an insurance contract. An insurance contract is protected by the U.S. Constitution because all contracts have the same protection. Insurance has been in existence for hundreds of years and a great way to preserve wealth. Most people view insurance as a liability when in reality it is an asset. A properly structured insurance contract can be worth hundreds of thousands of dollars if not worth millions of dollars.

Laws (IRS code) can change and they do every day, but a contract cannot change unless both parties agree to the changes, so the IRS code can change but the insurance contract must stay intact.

So when an insurance contract is properly structured, it can be funded so that the funds are immediately liquid, grow risk free (from the stock market), grow tax free and when the individual retires, they can withdraw their retirement tax free.

So where is the scam? Not all insurance contracts are the same. Not all greedy insurance agents are the same or as knowledgeable. Knowledgeable insurance agents who do right by their customers get paid handsomely and they should because when they can provide a solution that pays their client a 300% increase in spendable income during retirement (when they need it the most) and a steady income that they cannot outlive, then the measly 9% seams minuscule.

You see cost is only an issue in the absence of value.

Juxtapose a 401(k) plan to a properly structured insurance contract and eventually the 401(k) will run out of money because the stock market and taxes will take most of it. An insurance contract is not exposed to either.

The government would love for all their Certified Public Accountants and Certified Financial Planners to direct the public away from 770 plans. The more people who are in government sponsored retirement accounts, the more taxes that they will be able to collect.

But the wealthy use the 770 plan like a mechanic uses a socket wrench or screw driver. Banks have billions of dollars worth of 770 plans. Do you think that the wealthy use a 401(k) or even a Roth IRA? Do you think that the 1% use Certified Financial Planners? No!

If you want to talk about scams? Let’s talk about the Federal Reserve, Social Security or the Treasury.

What is the Federal debt? How much money is the Treasury printing every month? How much is the dollar really worth? Who is paying for our economic inflation? How is the government propping up the stock market? What will happen when the government cannot print money any longer?

I haven’t even talked about the government planning to take over your 401(k) or IRA.


Or our US dollar reserve currency status which is in serious jeopardy.

How long will the US dollar have world reserve currency status?


In conclusion, the masses (the 99 %) are asleep. They’re busy working harder every day just to keep up with inflation. They watch their TV programs and drink their beer. They believe what the media feeds them. They stopped thinking years ago. They believe that they are entitled and that the government will take care of them and that the government owes them. One day they will be forced to wake up and they will look around and say, “What happened? Where did our country go? Who’s taken it over?”


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