Troy Sharpe: How do you get the most guaranteed lifetime income when building a retirement plan that allows you to maintain your standard of living and quality of life throughout retirement?
Hi, I’m Troy Sharpe, CEO of Oak Harvest Financial Group, CERTIFIED FINANCIAL PLANNER™ Professional (CFP®), and host of The Retirement Income Show. With dozens and dozens and dozens of life insurance companies offering fixed annuity products and guaranteed lifetime income strategies, how do you the consumer, know if you’re going with Company A, or Company B, or C or D? In trying to do this research and figure it out? How do you know that you’re getting the most income you could possibly get?
Well, that’s a question that I had a long time ago when I opened at Oak Harvest Financial Group and since then, we’ve been creating what we call a heat map to help us determine which income strategies can be used in which situations to provide you the most amount of guaranteed lifetime income? I’m going to share this with you today. This is an outdated version.
I don’t share some of the proprietary information with everyone on the internet and the whole wide world but this is what we use and we have to have it updated on an ongoing basis, but I’m going to show you how it works. Let’s say you want to deposit $500,000, a part of your 401k, or maybe you have a lump sum instead of taking the pension you’re rolling over but it’s very important to you that you have income in retirement, that you don’t run out of income. You want to make sure that you don’t have to depend on the stock market going up all the time to provide your retirement income.
If you dedicate a portion of your money to a deferred income annuity, to provide guaranteed lifetime income for you and your spouse, what you ultimately have to determine is, at what age are you when you’re making this investment. Let’s say you want to retire at 63 and you don’t want to turn social security on but you have some savings.
You plan on making a deposit, let’s say a $500,000, and you have a long life expectancy and you’re healthy, you plan on taking income from your annuity, most likely around age 66, or 67 or maybe 68, maybe you’re going to work part-time for a couple of years, whatever it may be. What we would do is we go through our heat map here we look at your current age, when your policy is issued, so it’s 63.
Then let’s say you want to take income in four years, we just come down the chart, four years, 63 years old today, if you deposit $100,000, the green company, which this would be our key over here, the green company for every $100,000 you invest is going to give you a guaranteed lifetime income basis $7,592 per year for the rest of your life.
Now we have a single lifetime income table, which would be calculated for your life only. If you’re married and you want to joint lifetime income, there’s another table that tells us which strategies and products you have the most guaranteed income for you and your spouse’s current age, and the length of deferral that fits into your overall retirement plan.
If you’d like to take advantage of some of our proprietary data here to see which strategies and contracts can provide you the most guaranteed income, feel free to reach out to us go to the website, oakharvestfinancialgroup.com, reach out or give us a call. Let’s say now we wanted to break that $500,000 up to have, let’s say, three strategies. One of them gave us income here. The second one, we deferred longer and the third one, we deferred for, let’s say 10 years.
Let’s say we had increasing income, along with our social security. We had combined paychecks in retirement, let’s say $80,000, $90,000 a year no matter what the stock market does. In that instance, where issue age is 63 and now in this particular example, let’s say the first one we want it to grow four years, oh it’s the green company. The next one, we want it to grow eight years. Well, it happened to be the green company here, and then the 10. Now we go to this beige company. As you can see, most of this chart in the middle is the green company.
It’s no longer like this. As a matter of fact, this green company today with today’s rates isn’t even on the map. This company’s product that for us six months ago dominated most scenarios for length of deferral and current age of the issue, they’ve pulled back those rates. The insurance companies essentially hit its quota, and they are no longer amongst the most competitive guaranteed lifetime income options for you. People who have gotten this contract already they’re fully locked in, now this is fully guaranteed it will not change but the heat map changes for new prospective clients on a monthly basis.
Let’s say you retired in March, the company that provided you the most guaranteed income in the green, that’s fully guaranteed, and that’s your income, that’s what you will receive but if someone comes to see us in August, well, this heat map is completely changed, there’s going to be entirely new rates out there for them, which of course, we go through look at the updated heat map to help get the most guaranteed income possible.
This is why it’s important to work with someone who understands what it is that is going on in the marketplace, and how important it is to align your objectives, your income needs, or overall plan with the proper tools in the marketplace. Different companies have different ways of calculating their guaranteed lifetime income features, and it changes on a monthly basis.
If you’re looking for the most guaranteed income, and you’d like to take advantage of some of this proprietary data for your situation, just reach out to us, or oakinvestfinancialgroup.com send us an email, give us a call and we’ll see if we can work with you to help figure this out and incorporate a plan that gets you more income. Oftentimes, what I see is when retirees come in, oftentimes they’ve selected a strategy that is inferior, and not even if we did a comparison wouldn’t even be on this table, because this is just the top seven or eight carriers here.
There are literally 50, 60, 70 different companies that provide less income than what’s shown here. You want to make sure you don’t get one of those lesser companies. You want to make sure you get the most income possible in retirement, so you can maintain your standard of living. If you liked this video, make sure to subscribe to the channel hit that thumbs up button, of course.
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