Higher Retirement Income
Facts
We have clients, age 71 and 70 who are retired. They have $2 million in retirement funds that are in the market drawing $100,000 per year based on a 5% RMD. They are finding that this income level to be a little tight, and they are worried about inflation making it worse as the years go by.
The Problem
They would like more income to improve their lifestyle choices, and they would like to cushion versus inflation, but they are reluctant to draw down more than 5% for fear of running out of money later.
The Solution
Transfer the funds to a fixed indexed annuity that includes a choice to elect yearly lifetime income at a significant higher payout than 5% of account value. At ages 71 and 70 the yearly payout would be $155,000for life (joint life), beginning immediately.
The Outcome
$155,000 per year is considerably more than $100,000 per year. Furthermore, it is guaranteed to pay for life on both lives. This increase in income plus the lifetime payout assurance has literally change the quality of the clines lives.
- 50% Increase in net spendable monthly income
- Guaranteed income stream for both spouses for life
- 100% Protection of principal against market downturns
Summary
The problem here is adequacy of income; the risk that a dip in the market could worsen the situation and that there is no assurance of income in the futures. This situation is undesireable by correctable.