400k, 67 years old, wants 24k, minimal risk
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How about laddered CDs? Divide by 12, start one every month for the next year, keep a side pile of cash for the spending.
The way our government is spending money, and the dollar is dropping, one year interest rates should be at about 27% (easily covering the 7% withdrawal rate after spending two years of cash).400k. Lincoln I4Life VA. Nets about 20k, minimum risk, possible inflation protection. He should get social security. I’m amazed how little people have saved for retirement, and how much they expect from it.
We met – he left with a better understanding of what is possible. He’s willing to come down on the annual income to leave money behind. The insurance idea didn’t fly – he’s had a heart attack recently. … He liked the idea of a blend of fixed and variable annuities. … Plans to work another six months so nothing’s going to happen yet. … Turned out to be a good guy after all the initial bluster.
JNL has their 5 for life that doesn’t reduce DB. I think Ohio Natl. has something close as well.
Ask your favorite carriers for a survey application. If leaving money behind is a goal, life insurance is a good solution. Of course, if he’s uninsurable (or can’t afford a rated policy), better to find out during a survey than taking a full application, get denied, and have it show on his MIB.
I just checked Vanguard’s website. On their Lifetime Income Program, they will give the client $2,049.28/month, inflation adjusted, single life. Considering the state of his heart, he should probably expect to get “rated up” a few years, which will result in a slightly higher payout. If he’s rated up by 3 years, his monthly would be ~$2,200 / month.
Yes, the no commission part sucks, but this is probably what’s best for the client.
How is this best for the client? The client wants to leave money for his heirs. A single life payout does not do this for him.I just checked Vanguard’s website. On their Lifetime Income Program, they will give the client $2,049.28/month, inflation adjusted, single life. Considering the state of his heart, he should probably expect to get “rated up” a few years, which will result in a slightly higher payout. If he’s rated up by 3 years, his monthly would be ~$2,200 / month.
Yes, the no commission part sucks, but this is probably what’s best for the client.
Sorry - quite right. I didn’t process that when I read it.
What about preferreds then?I know Jackson has a VA that combines a lifetime withdrawal and death benefits. It ensures that the client gets a guaranteed income stream each year and it also leaves the principal to the beneficiary. As long as the client does not withdrawal more than the allowed income benefit each year , the client's beneficiary will receive no less than what's put into the contract despite withdrawals and market flucuation. At 67, I think it's 5% for life which is only $20K a year but maybe there is another VA that is 6%...Riversource?What would you do question.
Guy has 400k coming in a qualified lump sum. Hates stocks - railed about Bernie Madoff and bonuses for Wall Street fat cats. You know the type.
Anyway, he wants to generate 24k per year in income and leave the 400k to heirs. Coming back for a followup.
How do you approach it?
Note: I am NOT asking because I don’t what to do, just curious as to how others would handle.