Pension Maximization

[Death Cab For Tootie]

So, I come back to my original question (and its underlying assumptions)--how do you get enough life insurance with a 9% - 12% typical reduction, AND have it be sufficient in amount to ensure that a "conservative" return of 4%-5% will at least equal the pension payment to, say, age 95 or 100 or so (because the pension plan will).

Thanks.

Jim Boyd
P.S. Actually, I have come across your software when doing a "pension maximization" search. Is interesting, and I like your attention to the ethics of the process, as so many are so glib--and so incorrect. The example you use shows almost 18% as a reduction . . . .

Simple. Apply for, and purchase the maximum amount of insurance available to someone, given their age and income or assets.

 

[jwb0007]

Well, gee, I wonder why I didn't think to simply have someone purchase an undefined amount of life insurance to fit a tightly scripted scenario.

You were "kidding", right?

Jim Boyd

 

[wfdevereaux]

We actuarily identify the appropriate amount od insurance and reccomend a premium. You then apply those guides to your companies products to see if it it is viable for your client. Usually it is if the person is Table D or less.

 

[jwb0007]

We actuarily identify the appropriate amount od insurance and reccomend a premium. You then apply those guides to your companies products to see if it it is viable for your client. Usually it is if the person is Table D or less.

I also have developed what I think is an extraordinarily accurate and compelling PenMax software presentation. The "problem" is that, as I stated in my opening comment/question, it simply does not appear to work (with considerable appeal) until the reduction approaches 15% (or more). So far, no one has responded to that opinion/query.

 

[nycagent]

jwb - i'm not sure what answer you are looking for. you said yourself that the reduction needs to be >15% for it to make sense. and given that the example on pensionmax.com uses an 18% reductioon, i presume they agree as well. so the answer, which you may not want to hear, is that it won't work in MO where the reduction is only 9-12%. FWIW, I found the same thing in NJ when I looked into it w/some of the teachers I work with. While the concept appealed, the numbers just weren't compelling enough to justify it.

 

[jwb0007]

jwb - i'm not sure what answer you are looking for. you said yourself that the reduction needs to be >15% for it to make sense. and given that the example on pensionmax.com uses an 18% reductioon, i presume they agree as well. so the answer, which you may not want to hear, is that it won't work in MO where the reduction is only 9-12%. FWIW, I found the same thing in NJ when I looked into it w/some of the teachers I work with. While the concept appealed, the numbers just weren't compelling enough to justify it.

Thanks for responding sensibly. Actually, about 13% or so starts to look good here in MO.

Having learned long ago that I don't know every bit as much as I do, I was "hoping" that I might be overlooking something, or some product, or some technique.

It may be that a specialized reversionary annuity can work sufficiently often (esp. for females who often are classified as "Preferred" health classification).

If it can be sufficiently attractive, it "should" likewise work for divorced/widowed--single-- prospective retirees who have adult children/grandchildren and/or charitable interest. The very same economic benefit rationales apply as married, and it seems the PenMax discussions ignore the non-married segment entirely, which is very large.

What do you think?

Jim Boyd

 

[nycagent]

I'm not sure I see the advantage of reversionary annuity for the divorced/widowed single over just buying permanent life insurance, which gives way more flexibility and tax benefits, and is a much simpler/easier to understand product to boot.

What my analysis shows is that the existing life + survivor pension is a great deal for the teacher - especially given the substantially greater than inflation increases in health care we've experienced.

What I focus on is LTC, b/c that's the one area they aren't covered for, and needing care could require substantially all of their income. Especially for divorced/widowed/single.

 

[wfdevereaux]

Some plans are contributory plans. Often their survivor benefit costs are lower. All you can do is extablish the required insurance and see if it is available on the market place. Sometimes it will not work.
As for single people, most plans don't offer a survivor option to them, so there is nothing to compare to.
I have only located one small company that offer reversionary annuities. There are pros and cons to using it vs using traditional insurance. I have long advocated a good reversionary plan because it could be substantialy less costly.

 

[Marpol]

I suppose a particularly resourcesfull agent might also try and pmax a 412i

Thinking outside the box BNTRS....I like it....as long as it does not end up as a Listed Transaction

 

[InsExec]

I own the software on pensionmax com. I have been doing this since 1974. Check out the site and see if it helps you out. We seldom find a case where it will not work. Actuarily certified for accuracy. I also do Fly-In Work shop on the topic, if you are interested in getting a group together.

Have a great day.

I would be interested in possibly buying the software.
Please contact me at [email protected]