Inbound Prospect Call

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Aug 28, 2009 12:23 pm

A guy called the other day wanting to retire, says he has $300,000 NQ.  I pull up SPIA rates and find the best I can do is just shy of $2,000/month gross.  He wants $30,000/year, which I tell him doesn't exist.

 
So I run the NET monthly income.  $30,000 annual income taxed at 25% results in a net $1,875/month income.  With the SPIA, his net income is $1,760/month.  Pretty damn close in my opinion.
 
This is the only viable solution I can find for this guy who is 64 years old.  Any other options that you guys would look into? 
Aug 28, 2009 12:56 pm

Once a year I get a similiar call except they don't want to touch their principal, no fees, risk and want the money 100% accessible.


 
Snags, it either has to be a SPIA or he needs to change his expectations.  Or he can roll the dice with High Yield.
Aug 28, 2009 12:57 pm

Snags, is this SPIA you're running single or joint life?

Aug 28, 2009 1:11 pm

Mike, this is that call (so far).

 
D, it is a single life SPIA.
Aug 28, 2009 6:46 pm
snaggletooth:

A guy called the other day wanting to retire, says he has $300,000 NQ.  I pull up SPIA rates and find the best I can do is just shy of $2,000/month gross.  He wants $30,000/year, which I tell him doesn't exist.

 
So I run the NET monthly income.  $30,000 annual income taxed at 25% results in a net $1,875/month income.  With the SPIA, his net income is $1,760/month.  Pretty damn close in my opinion.
 
This is the only viable solution I can find for this guy who is 64 years old.  Any other options that you guys would look into? 


 
 
Where are you getting $30m taxed at 25%?  You're tax rate for both situations should be the same.
Aug 28, 2009 10:00 pm
Jebediah:
snaggletooth:

A guy called the other day wanting to retire, says he has $300,000 NQ.  I pull up SPIA rates and find the best I can do is just shy of $2,000/month gross.  He wants $30,000/year, which I tell him doesn't exist.

 
So I run the NET monthly income.  $30,000 annual income taxed at 25% results in a net $1,875/month income.  With the SPIA, his net income is $1,760/month.  Pretty damn close in my opinion.
 
This is the only viable solution I can find for this guy who is 64 years old.  Any other options that you guys would look into? 


 
 
Where are you getting $30m taxed at 25%?  You're tax rate for both situations should be the same.
 
I am using the same tax rate.  It's just that a portion of the SPIA income is not taxable.
Aug 29, 2009 1:49 pm
snaggletooth:

A guy called the other day wanting to retire, says he has $300,000 NQ.  I pull up SPIA rates and find the best I can do is just shy of $2,000/month gross.  He wants $30,000/year, which I tell him doesn't exist.

 
So I run the NET monthly income.  $30,000 annual income taxed at 25% results in a net $1,875/month income.  With the SPIA, his net income is $1,760/month.  Pretty damn close in my opinion.
 
This is the only viable solution I can find for this guy who is 64 years old.  Any other options that you guys would look into? 

 
We can't make someone else's problem our own problem.   Sometimes we have to tell people that their goals are not achievable.  A SPIA will give him the greatest guaranteed income, but it is guaranteed to not give him what he wants.  If he invests the money, he can get what he wants, but he will probably outlive his money and be broke.  He needs to invest the money and start drinking and smoking heavily.
 
Be honest with him.  Tell him that he can't retire if that is the amount of money that he needs.  Also, keep in mind that inflation is going to crush that SPIA payment.
Aug 29, 2009 2:58 pm
iceco1d:

Snags,

I think jeb's point is that @ 30K in gross income, your average tax bracket is under 15%, not 25%.  Then again, I"m pretty hammered, so I dunno if I'm even posting in the correc threda.

 
Nice work Ice.  I'm impressed!