65 Year Old Lady is Getting $540,000 Lump Sum Instead of Pension

[damarcuswilson]

She lives in Illinois and does not trust the state with her money.
This what I did for her. I said she should move her money into a Fixed Rate Capital Securities fund at Fidelity. Then I calculated some of her expenses (rent, medicare b premium, medicare d premium, lights and gas) and told her to take $200,000 out of the $540,000 transfer it into a SPIA to cover those expenses. Take $40,000 and place it in a money market account and leave the rest of the money in the fund and draw only the earnings. What do you think about that advice?

 

[YouGotMyMoney]

if u are asking us for our opinion about this kind of matter, are you really at the stage in ur career where u should playing with other people's money?

 

[0b1kanobee]

She lives in Illinois and does not trust the state with her money.
This what I did for her. I said she should move her money into a Fixed Rate Capital Securities fund at Fidelity. Then I calculated some of her expenses (rent, medicare b premium, medicare d premium, lights and gas) and told her to take $200,000 out of the $540,000 transfer it into a SPIA to cover those expenses. Take $40,000 and place it in a money market account and leave the rest of the money in the fund and draw only the earnings. What do you think about that advice?

Sounds like a recipe for disaster. Put it this way, there are better options out there for her.

Kinda hard to make any determination without knowing 95% of the missing information you haven't provided.

Other than that, it sounds great!

 

[iceco1d]

I like the SPIA and money market. I don't like the massive chunk sitting in 1 fund.

 

[0b1kanobee]

I like the SPIA

Might do better spending down a fixed annuity.

I just ran a 10 year certain SPIA to get 12,000 per year it took 115k.

By spending down a fixed annuity after 10 years I got 8k and change left over so I beat the SPIA by 3k and my client is still in charge of her money where in the SPIA there is no flexibility at all.

Something to consider if there are other buckets of money. It works for the case I'm working on now. Your millage may vary.

 

[iceco1d]

No kidding. SPIA rates really do suck right now.

 

[arnguy]

Is she single? If so, what's her phone number?

 

[damarcuswilson]

Sounds like a recipe for disaster. Put it this way, there are better options out there for her.

Kinda hard to make any determination without knowing 95% of the missing information you haven't provided.

Other than that, it sounds great!

What information would you need? I'm a newbie.
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My goal for is to have some income for life and have access to her money without hassle. After thirty days with fidelity, the money can be withdrawn withour penalty. I'm brand new with annuities.

 

[0b1kanobee]

What information would you need? I'm a newbie.
- - - - - - - - - - - - - - - - - -
My goal for is to have some income for life and have access to her money without hassle. After thirty days with fidelity, the money can be withdrawn withour penalty. I'm brand new with annuities.

Well how much money does she need per year now? Then you have to figure in the costs of inflation because whatever she needs now won't be enough to keep up with inflation down the road. What looks good now might not look good later so to speak.
Are you securities licensed?
What state are you in?
Is leaving money to heirs a concern?
Is she comfortable with taking a certain amount of risk?

You should have a list of things which are ranked by her in order of importance.

Knowing how much money she needs now and how much she will need in the future to account for inflation is the biggy.

Who are you currently licensed with or companies to which you represent?

 

[damarcuswilson]

Well how much money does she need per year now? Then you have to figure in the costs of inflation because whatever she needs now won't be enough to keep up with inflation down the road. What looks good now might not look good later so to speak.
Are you securities licensed?
What state are you in?
Is leaving money to heirs a concern?
Is she comfortable with taking a certain amount of risk?

You should have a list of things which are ranked by her in order of importance.

Knowing how much money she needs now and how much she will need in the future to account for inflation is the biggy.

Who are you currently licensed with or companies to which you represent?

That $200,000 comes with an 2.75% annual inflation guard. In Illinois. She wants to leave some money with her grandchildren. The money that would be in the income fund and money market account is the money she wants to leave with her grandchildren. I want to use Symetra.