Secondary Market Annuity Case Study 2- Immediate Income
We’ve had a lot of comments from readers of the SMA case study #1, so decided to write up another recent transaction to further illustrate how a secondary market annuity can be used to beat the low rates and generate retirement income.
“Mike”, who has been a member of the site for over a year, had plans to retire at the end of April, 2011 and was looking for the best income options for retirement.
While wanting to continue meaningful growth for future planning opportunities, he was also concerned about too much risk with his hard-earned nest egg. We needed to find a way to enhance his level of retirement income so additional assets could be placed in reserve for a later date.
I knew how much money he had to invest so I kept an eye on the market and was able to grab the perfect investment for him.
What did Mike get?
We found a Secondary Market Income Annuity issued by New York Life with a purchase price of $309,000 that carried excellent benefits. Here’s how it breaks down…
$309,000 initial investment.
6.25% guaranteed effective yield over 20 years. Income starts immediately at…
- $1600 monthly continuing for nine years, then…
- $2150 monthly for eleven months with a lump sum of $100,000 in month twelve, then…
- $2150 for seven years and nine months, then…
- $2450 for two years and two months.
Aggregate income over the 20 year period will be more than $558,000!
Compare This Secondary Market Annuity Income Stream To An Immediate Annuity:
What is astounding is that investing his initial $309,000 in a period certain, 20 year immediate annuity today would have paid him only $1400 monthly based on his and his wife’s age. This is an aggregate total of $336,000.
Mike was able to purchase a significant income stream from a superior rated insurance company, and also receive a big lump sum payment in the middle of the term. With this lump sum payment he has plenty of options for covering the income gap at the end of the term.
Again, this may not represent your situation but the enhanced rates in the secondary market lend a great deal of power to the idea of conservative asset management in retirement.
Wouldn’t you like to know what this market can do for you?
Contact us now to talk about a secondary market annuity strategy for your unique situation!