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Leveraging Currents Assets to Provide Guaranteed Income
Retirees can be hit hard by a decline in interest rates and market fluctuations......
People who retired in the 1980's and the 1990's and currently are finding that their retirement nest egg just isn't able to provide the income they were counting on. Many investors were under the impression they would be receiving much higher returns on their investments than are currently available.
- CD Rates – Average to low
- Bond Rates – Low
- Stock Market – Very Volatile
People dependent on interest income from fixed income investments are in a tough situation. People dependent on stocks can and have had their savings substantially reduced.
Are you eating into your savings? Are you worried about your income?
Here's How It Works in Three simple steps:
- Liquidate or sell existing unproductive assets
- Use the proceeds to purchase a single premium immediate annuity (SPIA)
- Make annual exclusion gifts of the excess annuity income to an irrevocable life insurance trust (ILIT)
If you are age 70 or older and...
- Concerned about having enough or more income
- Concerned about leaving money to heirs
- Income is safe
- Secure, guaranteed income from the annuity
- Usually provides more income
- Can have tax advantages
- Life insurance assures that a legacy is preserved
- Heirs still receive the value of the asset
- Eliminates market risk
- Maximizes net after-tax income
- Potentially increases investment rate of return
- Increases legacy to heirs
- You must be underwritten for life insurance
- Likely loss of liquidity
- Income is fixed
- Determine how much income will be produced from an immediate annuity purchased with the assets you have available.
- Determine the cost (premium) of life insurance to replace those assets
- The net gives you your new gross income
Features
- Gross income from the annuity is guaranteed.
- Life insurance premium is guaranteed.
- No market risk.
- Potential income & estate tax savings (if policy ownership is correctly structured).
- Why do I need life insurance?
Because an immediate annuity stops upon the death of the party or parties to whom it pays income – like a pension – so the assets are then gone. The life insurance replaces those assets
- This sounds too good to be true – how can it be done?
One company provides lifetime income – like a pension. The second company provides life insurance to replace the assets.
- Are there tax savings?
There can be both ordinary income tax and estate tax savings with income maximization. Immediate annuities work by the exclusion- ration tax rule and life insurance is income tax free and can be estate tax free if set up properly.
- Peace of Mind
- Legacy Creation
- More income – More Tax-free Wealth Transfer
Arnold Financial Group(AFG) provides financial services to qualified clients. Any discussion of investments and investment strategies of funds (including current investment themes, research and investment processes, and portfolio characteristics) represent the views of AFG at the time of publication. Any expression of opinion is subject to change without notice and are not intended to be a guarantee of future events.
This document is supplied by AFG for information only and does not constitute a solicitation to buy or sell securities. Although information and opinions in this document have been obtained from sources believed to be reliable, we do not warrant the accuracy or completeness and accept no liability for any direct consequential losses arising from its use. The information is representative of AFG viewpoints at the time of publication. Not all products and services are available at all locations and not all instruments are suitable for all investors.
6351 South East St. • Suite A •Indianapolis, In 46227
Phone: (866)259-5020 • Fax: (317)705-0050 • Email: jack@arnoldfinancialgroup.com