RightCapital Case Study - Incorporating Guaranteed Income
4 slides from RightCapital helped an advisor show his prospect:
• The potential pitfalls of the portfolio her current advisor had her in.
• How he could help achieve her goals in retirement (and why she should work with him).
• Why using an annuity to generate guaranteed income made sense for her.
Research indicates 65% of people are visual learners, and many argue the percentage is even higher for older adults. This month, I want to highlight how RightCapital's clear, concise outputs helped an advisor visually show a prospect how he could help her meet the retirement goals she had, why purchasing a guaranteed income annuity made sense for her, and bring her on as a client.
Case Facts:
• Prospect is a single 60 years old female
• She wants to retire from teaching in 2 years
• She has $1m of assets and wants $60,000/year of income adjusted for inflation
RightCapital - Current Portfolio:
• Her current portfolio was 49% bonds, 37% equities, and 14% cash.
• The probability was 81% that her money would last into her 90s with this portfolio.
• She'd need to work until age 64 if she wanted a 90%+ probability of her money lasting.
RightCapital - Proposed Portfolio:
• Use 25% of her assets to purchase a guaranteed income annuity.
• Invest the remaining 75% of her assets more aggressively.
• She could retire at her desired age and have a 96% probability of her money lasting.
• **NOTE** the advisor also looked at the proposed portfolio without the annuity. The probability of success was only 85%. The annuity was mitigating sequence of return risk and kicked off an IRR of 6.5% by age 90
Spotlight Client Solution*
Guaranteed Income Payouts are OFF THE CHARTS
Income now: A 67 year old can deposit $100k and receive $7,800/year income immediately.
Income for retirement: A 60 year old couple can deposit $100k and start receiving $10,000/year of income at age 65.
Satisfy RMDs:A 73 year old can satisfy 2.25x their RMD taking immediate income.
Notable Client Solutions*
8.75% Guaranteed S&P Cap
After MassMutual Ascend and Global Atlantic's recent rate decreases, Revol One's Enduris 6 has become the go-to guaranteed S&P cap product.
· S&P annual cap guaranteed at 8.75% for all 6 years of the surrender schedule.
· 10% liquidity available years 2-6.
· Former CEO of Allianz is their CEO.
Get a 250% Higher Death Benefit in 15 years
Global Atlantic just re-vamped their legacy annuity, and it's a great option for clients who can't qualify for life insurance.
10% simple interest for up to 15 years grows $100k to $250k.
Lump sum death benefit.
Beneficiaries can 1035 after owner's death and receive income each year to life expectancy.
*Rates may be subject to premium banding. Products may not be available in all states. Replacement must be suitable and meet all requirements.
At Foundational Income, we strive to bring relevant topics and solutions to your fingertips in a straightforward way. We don’t see the need to keep products nor carriers a mystery. If you’d like to discuss any of this in more detail, give us a call!