Here are a variety of case studies of using Secondary Market Annuities in private portfolios.
Client: Dan S
Situation: 70 years old, Needed $5000/ month for 10 years, starting in 10 years, after a business sale note stopped paying off.
Due Diligence: Concerned with volatility, loss, can’t replace the capital at his age, and caution at doing business over the internet
Has: $300,000 cash to work with.
Solution: After doing extensive personal background checking on us, and speaking with our attorney and his own advisors, Dan decided to use Secondary Market Annuities. He used several deferred income deals averaging 5.5% yield to produce the desired income.
Client: George And Linda R.
Situation: Mid 50’s, Both Recently retired, debt free, seeking fixed term income, planned to move to Mexico and live cheaper.
Due Diligence: Had researched annuities online and met with multiple advisors. We encouraged him to continue the research and use us as a library or to bounce any ideas off. Over time, our honest advice helped Frank make his own informed decision.
Assets: $500,000 in 2 IRA’s
Solution: Secondary Market Annuities income streams produced more than enough income for 20 years. They planned to save and reinvest over time and not spend all their income, but the certainty of income made retirement a reality. Surprisingly, both returned to work after putting these retirement plans into action, but did so complete by choice and because they got great offers.
Client: Colin K.
Situation: Higher income, late 40’s aged doctor. Excellent saver, seeking long term, deferred lump sum and income streams for planned retirement in mid 60’s. 20-40 year timeline
Assets: $600,000 cash and IRA
Due Diligence: Sought a long term, set and forget 6 to 7% yield for years. Chased the market down, but after seeing SMA’s and doing due diligence on us and the industry, decided these were perfect.
Solution: Used multiple life contingent and guaranteed income and lump sum SMA cases and a family trust to create a substantial deferred income and asset base for future. Of special note, he took advantage of ultra low home equity rates to refinance his home, and used the proceeds to buy a higher yielding guaranteed SMA that will pay off his mortgage with several hundred K extra. Generated several hundred $K net income over 18 years using otherwise stagnant home equity.
Client: Dan K.
Situation: Retired early, seeking ultra safe steady income.
Due Diligence: Before working with us, he already owned multiple annuities and SMA’s but he found our advice, selection, and service to be far superior to his ‘other guys.’
Solution: Client spent $250K on deferred income ‘longevity insurance’ first to secure lifetime income from age 80 onwards. Then used $800K to fill in a stable and guaranteed defined timeline income using SMA’s. Has more than enough guaranteed income to live on for life. Using long term deferred longevity insurance, life contingent SMA, and other SMA’s, the blended average assumed rate of return thru age 100 is over 8%, all 100% guaranteed. Turning $1M into over $8M guaranteed lifetime income. DIA/Lifetime income contracts bought early were the key to making it all work.
Client: Kurt H.
Situation: Late 50’s, just sold company, looking to create income with the down payment as his stock sale and note carryback matured and paid over time
Due Diligence: Needs income to be stable while the business note matures and pays off. Did due diligence by comparing our services to other SMA vendors and by speaking to prior clients and our attorney.
Solution: Purchase 10 year, immediate income Secondary Market Annuities
Client: Dave L.
Situation: Late 50’s, seeking to use a stagnant IRA to create income to satisfy RMD’s and to live on. Substantial other assets, still semi-working
Due Diligence: Dave is a confident investor and individual. Shopped the market widely, spoke to multiple vendors and advisors before committing. Ultimately, Dave brought the deal he wanted to buy to us from another vendor but wanted us to process it for him because he like how we did business, how we spoke honestly, and how we handled legal review and transparency.
Solution: 10 year deferred, 20 year payout SMA in an IRA. Satisfies RMD’s and used money otherwise sitting in cash. 5.75% effective rate of return.
Client: Rich R.
Situation: Retired at 65 with IRA’s and substantial other assets.
Due Diligence: As an owner of multiple SMa’s prior to knowing us, Rich had already addressed many of his concerns about SMA’s. He initially found us researching Hybrid annuities, then came back around to SMA’s through us.
Solution: Initially invested in lifetime income FIA. After discovering SMA’s, he chose to surrender and ‘self insure’ longevity risk thru other assets. $1.8M investment producing over $4.6M in guaranteed income to himself and heirs over 35 years. Sufficient other assets and income to re-invest over time.
Client: Bill K
Situation: Retired, Spouse working. Had pensions, SS, and a significant fixed annuity
Due Diligence: attracted to the yield of SMA’s so did extensive due diligence on us, spoke to attorney and to prior clients before commitment.
Assets: $300K cash to invest
Solution: Created additional defined term income streams for 20+ years, while preserving the assets in both the fixed annuity and in other holdings. Pensions, annuities, and SS combined to create a broad and secure income stream.
Client: Bill F.
Situation: Retired early, with pension and savings. 2 High School aged boys ready for college
Due Diligence: Did his own extensive due diligence on us- tracked down where we lived, our family, called references, spoke to attorney. Documented all, all checked out (Phew!)
Solution: Bob sought SMA’s to create high yield yet deferred income that would mature after the kids were out of college. Using deferred income SMA’s, Bob created an income stream to support himself and wife. According to his own research, he felt the annuities would not be an asset to list on aid applications (your mileage will vary)
Client: Rob B.
Situation: laid off, significant savings, single man.
Due Diligence: Speaking with us for months about regular annuities, but did not take action until SMA’s became available.
Solution: Within 15 minutes of us learning about SMA’s Rob was our first buyer. They were perfect for his situation, and he created income and deferred lump sums that set him up for life. No other annuity offered the same yield and output. Has subsequently become a good friend, come on fishing trips with us, and has spoken to numerous other clients of ours as a reference.