Annuities: There’s a Time
and Place For Them Too
LIFETIME INCOME CASE STUDY
Tim & Jane Goldberg
Registered Investment Advisor
Presented by Financial Sense Advisors, Inc.
Important Notice:
This is a hypothetical illustration based on real life
examples. Names and circumstances have been
changed. The opinions voiced in this material are
for general information only and are not intended
to provide specific advice or recommendations for
any individual. To determine which investments or
strategies may be appropriate for you, consult
with a financial advisor prior to investing.
Financial Sense Advisors, Inc.
Registered Investment Advisor
WHO ARE TIM & JANE?
Ages: 66 & 64
Jobs: Project Manager & Secretary
- Tim built a very successful consulting
business but has had some recent health
concerns
- Jane managed the households finances
over the years and wants to give up that
responsibility when they retire.
- Seeking a professional to help them
manage risk and create investment
income they can live off
WHAT IS IMPORTANT TO TIM?
Having reliable
income in retirement Being able to retire
soon
Tim
Managing potential
medical costs
WHAT IS IMPORTANT TO JANE?
Not outliving their
Reducing risk in their assets
portfolio
Jane
Maintaining a similar
lifestyle in retirement
TIM & JANE’S CURRENT RISK TOLERANCE?
Most Conservative 1 - 20 - 30 - 40 - 50 - 60 - 70 - 80 - 90 - 100 Most Aggressive
Current Risk Score Portfolio Risk Score
30 45
TIM & JANE’S CURRENT BUDGET
Income $210,000
Expenses ($112,000) Discretionary
25%
Surplus $98,000
Living Expenses
75%
TIM & JANE’S RETIREMENT BUDGET
Income $60,000
Expenses ($110,000) Discretionary
30%
Shortfall ($50,000)
Living Expenses
70%
TIM & JANE’S BALANCE SHEET
Real
Estate + Portfolio - Liabilities = Net Worth
$680,000 $2,700,000 ($380,000) $3,000,000
TIM & JANE’S ASSET ALLOCATION
25%
Asset Allocation
30%
Stocks
Bonds
Cash
45%
TIM & JANE’S FINANCIAL PLAN CHALLENGES
1. Having predictable income in
retirement.
2. Managing emotions and
investor biases.
3. Meeting their income desires
in retirement.
TIM & JANE’S RETIREMENT INCOME STRATEGY
Pension
$27,000
+ Social
Security
$33,000
+ Portfolio
$84,800
= $
Total
Income
$144,800
Investment Portfolio Expenses ($110,000)
Tim’s Retire. $440K Stocks & Bonds @ 3.2%1 $14,080
Surplus $34,800
Jane’s Retire. $700K Stocks & Bonds @ 3.2%2 $22,400
Joint Account $1.51M Stocks & Bonds @ 3.2%3 $48,320
Cash $350K
1,2 & 3: Yields are for current portfolio yields as of 4/30/18. Please see disclosures at the end of this presentation for security risks.
GOAL BASED RECOMMENDATIONS
FOR TIM & JANE
Reducing Risk in Portfolio Creating Steady Income
• Reduce exposure to growth oriented • Invest $500k into an annuity to produce
and high beta stocks stable income and reduce sequence risk
• A fixed indexed annuity can act as a • Focus on bonds and dividend paying
bond proxy stocks
Protecting Nest Egg
• Using an annuity allows investments the
opportunity to grow while at the same
time reduce volatility of their assets
Disclosures:
1. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values
will decline as interest rates rise and bonds are subject to availability and change in price.
2. The payment of dividend is not guaranteed. Companies may reduce or eliminate the
payment of dividends at any given time.
3. Fixed annuities are long-term investment vehicles for retirement purposes. Gains from
tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees
are based on the claims paying ability of the issuing company. Withdrawals made prior to
age 59 1/2 are subject to a 10% IRS penalty tax and surrender charges may apply.
4. The information in this material is not intended as tax or legal advice. Please consult legal
or tax professionals for specific information regarding your individual situation.
Financial Sense Advisors, Inc.
Registered Investment Advisor
Financial Sense® Advisors, Inc.
Registered Investment Advisor
If you have any specific questions or comments, please give us a call at
(858) 487-3939
We’re happy to speak with you.
Post Office Box 503147 - San Diego, CA 92150-3147
10809 Thornmint Road 2nd Floor - San Diego, CA 92127-2403
(888) 486-3939 Toll Free (858) 487-3939 Tel (858) 487-3969 Fax
Advisory services offered by Financial Sense® Advisors, Inc.
An SEC Registered Investment Advisor.
