The client is a 70 year old female living off of social security and income from a small part time job. She has assets available that she uses for emergencies or to pay for large expenses. Her biggest concern is that her current assets are going to run out of money and she will have to survive only on her social security. She would like to stop working and have extra income to be able to visit her children and grandchildren. Along with needing a long term retirement plan to supplement her social security, she also needs immediate income to live more comfortably.
The client has a house with a fair market value of $400k with no current mortgage. There is an open HELOC available, but she does not have the cash flow to pay for a new mortgage payment. She also wants to be able to pass down her house to her children mortgage free. Her current assets include a $250k Money Market account and a 401(k) for $100k. Due to the recent market she has experienced a loss in these funds and fears they are not going to be enough to get her through retirement.
For this client we were able to provide an immediate income in years 1-10 of $28k. Along with the immediate income, starting in year 11 she would be able to receive income of $32k that will last into perpetuity. She felt comfortable that her assets were now set up in a structured retirement plan with safety and guarantees that will allow her to live a comfortable retirement. A death benefit of $398k was provided that increased her total estate and legacy that would be left behind to her children. We were able to not have any additional out of pocket costs and her children will still be able to receive the house mortgage free.
Unfortunately, since other financial planners have been reading my blog and stealing my strategic designs for their own use, you'll need to contact me directly to see what we did to assist this client.
J. Michael Nash
Financial Strategist
The Michael Nash Group
1911 Rio Grande
Austin, Tx 78705
(512) 494-0300 office
(512) 494-0301 fax
(512) 731-8818 mobile
"Good, Better, Best! Never let it rest! Never let it rest until GOOD gets BETTER and better gets BEST!"
Monday, November 17, 2008
Thursday, November 13, 2008
New Case Design
67 year old male recently divorced. After finding a new love in his life he is now putting the pieces back together and looking to get back on track.
With $465,000 currently in a money market account he wants to establish a lifetime income and a Life Insurance policy for his new wife. This case resulted from an agent who thought the client was uninsurable but reads my blogs. The client has multiple medical conditions, one of which is Parkinson's disease. We ordered his medical records for the Life Insurance policy and used them to our advantage in reducing the cost of lifetime annuity benefits and produced larger annuity benefit payments. Increasing the maximum payment from the Annuity ultimately covers the cost of the new Life Insurance policy, and creates an approximate total payout of $662,147.
The original agent was unaware that this concept was even possible. We've earned a huge amount of credibility and respect for going above and beyond the clients expectations by delivering two strategic policies that we designed when other agents thought he was uninsurable.
With $465,000 currently in a money market account he wants to establish a lifetime income and a Life Insurance policy for his new wife. This case resulted from an agent who thought the client was uninsurable but reads my blogs. The client has multiple medical conditions, one of which is Parkinson's disease. We ordered his medical records for the Life Insurance policy and used them to our advantage in reducing the cost of lifetime annuity benefits and produced larger annuity benefit payments. Increasing the maximum payment from the Annuity ultimately covers the cost of the new Life Insurance policy, and creates an approximate total payout of $662,147.
The original agent was unaware that this concept was even possible. We've earned a huge amount of credibility and respect for going above and beyond the clients expectations by delivering two strategic policies that we designed when other agents thought he was uninsurable.
Tuesday, November 4, 2008
Case Design - 401k eliminate non-matched contributions
The client is 30 years old and looking for a way to get a better return on a languishing 401k. He has siblings with similar concerns that are also contributing to 401k’s and are realizing they are not making any headway with their investment strategy. They all have current mortgages on their properties with very little equity established.
They are concerned about leaving these investments in such a volatile market and would like more safety and security. The clients also have current 401(k) balances of $12,000, $22,000, $17,000 and $33,000 respectively and are contributing between 4 and 10% of their salary for a total combined monthly contribution of $3,083.
For this case we proposed a plan that is utilizing a guaranteed UL life insurance policy with a $1 Million Death Benefit on their 66 yr old father (who is standard – non tobacco) using the non-matched 401k contributions. Since the oldest sibling is 30 yrs old and won’t need his retirement funds for 35 yrs, the likelihood of the father being alive at that point is EXTREMELY small.
The monthly premium for this policy is $2,375 as long as the father is alive.
The siblings are able to be the owners and beneficiaries of the policy while the father is the insured.
Insurance death benefits are tax free to the beneficiaries in this example. Compare that to the uncertain return of the 401k and the certain taxation and this strategy FAR OUT-PERFORMS the 401k even if the insured lives for another 35 years. Analyze the rate of return from year 1 through year 35 of the plan. The numbers are staggering.
It may sound morbid to bet or bank on the life expectancy of a loved one but the reality is that none of us are getting out of here alive. In this case the father was more than willing to do this as he had always wanted to leave a legacy behind for his children but wasn’t able to because of unforeseen events such as hurricane Katrina. Now, upon his passing, his siblings will enjoy the memory of their father with $1 Million Tax Free Dollars!
Please call me to discuss your situation and our design team will custom tailor a strategy that will likely save you thousands in taxes and perhaps make you a millionaire sooner than later.
Cordially,
J. Michael Nash
Financial Strategist
The Michael Nash Group
1911 Rio Grande
Austin, Tx 78705
(512) 494-0300 office
(512) 494-0301 fax
(512) 731-8818 mobile
"Good, Better, Best! Never let it rest! Never let it rest until GOOD gets BETTER and better gets BEST!"
They are concerned about leaving these investments in such a volatile market and would like more safety and security. The clients also have current 401(k) balances of $12,000, $22,000, $17,000 and $33,000 respectively and are contributing between 4 and 10% of their salary for a total combined monthly contribution of $3,083.
For this case we proposed a plan that is utilizing a guaranteed UL life insurance policy with a $1 Million Death Benefit on their 66 yr old father (who is standard – non tobacco) using the non-matched 401k contributions. Since the oldest sibling is 30 yrs old and won’t need his retirement funds for 35 yrs, the likelihood of the father being alive at that point is EXTREMELY small.
The monthly premium for this policy is $2,375 as long as the father is alive.
The siblings are able to be the owners and beneficiaries of the policy while the father is the insured.
Insurance death benefits are tax free to the beneficiaries in this example. Compare that to the uncertain return of the 401k and the certain taxation and this strategy FAR OUT-PERFORMS the 401k even if the insured lives for another 35 years. Analyze the rate of return from year 1 through year 35 of the plan. The numbers are staggering.
It may sound morbid to bet or bank on the life expectancy of a loved one but the reality is that none of us are getting out of here alive. In this case the father was more than willing to do this as he had always wanted to leave a legacy behind for his children but wasn’t able to because of unforeseen events such as hurricane Katrina. Now, upon his passing, his siblings will enjoy the memory of their father with $1 Million Tax Free Dollars!
Please call me to discuss your situation and our design team will custom tailor a strategy that will likely save you thousands in taxes and perhaps make you a millionaire sooner than later.
Cordially,
J. Michael Nash
Financial Strategist
The Michael Nash Group
1911 Rio Grande
Austin, Tx 78705
(512) 494-0300 office
(512) 494-0301 fax
(512) 731-8818 mobile
"Good, Better, Best! Never let it rest! Never let it rest until GOOD gets BETTER and better gets BEST!"
The Next Looming Crisis
The Next Tsunami about to hit you is the Looming Credit Card Crisis!
Credit card companies across the board are immediately dropping risky card holders, raising interest rates on others, and lowering credit card limits and doing this all without any warning to the consumer.
Through June of this year, credit card defaults have totaled $21 Billion dollars and another $55 Billion is expected to mount before 2010!
How does this affect you? Well, it may not…provided you pay off your credit card balances monthly and carry no recurring debt. However, if you are like most Americans and maintain balances on your credit cards while making that minimum required monthly payment, you could be in for a huge shock when you next review your credit score (officially known as your FICO score).
Why? You may ask. It’s simple. About 1/3 (if not more) is derived from your debt to limit ratio. If you appear to have very high debt to limit ratios, your score will be much lower than someone that carries no recurring balances.
So, let’s pretend for a moment that you feel like your balances are relatively low compared to your limits (and you feel you have great credit) and you are out shopping for a new car or a new mortgage and apply for financing that new purchase. Your credit report is ordered and you’re informed you that due to your credit score you don’t qualify for the best interest rates that are available.
What happened? Well guess what? Without notice, your credit limits were lowered to those of your actual balances essentially freezing your available credit lines. You now appear to be “maxed-out” on your credit cards and your FICO just took a dive! The catch 22 here is that credit card companies monitor your credit report and notice what the competition is doing and to protect themselves usually follow suit with each other. Also, since your cards are now “maxed-out”, that initial teaser rate may now be raised to 18% or higher because you now seem like a higher risk of default.
There is a way to correct this if it has happened to you. Feel free to call me for a proven script that will raise your limits to what they once were but keep in mind, you may have to re-qualify for that limit by providing proof of employment and updated financial information.
I have had several clients in the last 3 weeks that have been victims of this practice but have since had their limits restored.
Cordially,
J. Michael Nash
Financial Strategist
The Michael Nash Group
1911 Rio Grande
Austin, Tx 78705
(512) 494-0300 office
(512) 494-0301 fax
(512) 731-8818 mobile
"Good, Better, Best! Never let it rest! Never let it rest until GOOD gets BETTER and better gets BEST!"
Credit card companies across the board are immediately dropping risky card holders, raising interest rates on others, and lowering credit card limits and doing this all without any warning to the consumer.
Through June of this year, credit card defaults have totaled $21 Billion dollars and another $55 Billion is expected to mount before 2010!
How does this affect you? Well, it may not…provided you pay off your credit card balances monthly and carry no recurring debt. However, if you are like most Americans and maintain balances on your credit cards while making that minimum required monthly payment, you could be in for a huge shock when you next review your credit score (officially known as your FICO score).
Why? You may ask. It’s simple. About 1/3 (if not more) is derived from your debt to limit ratio. If you appear to have very high debt to limit ratios, your score will be much lower than someone that carries no recurring balances.
So, let’s pretend for a moment that you feel like your balances are relatively low compared to your limits (and you feel you have great credit) and you are out shopping for a new car or a new mortgage and apply for financing that new purchase. Your credit report is ordered and you’re informed you that due to your credit score you don’t qualify for the best interest rates that are available.
What happened? Well guess what? Without notice, your credit limits were lowered to those of your actual balances essentially freezing your available credit lines. You now appear to be “maxed-out” on your credit cards and your FICO just took a dive! The catch 22 here is that credit card companies monitor your credit report and notice what the competition is doing and to protect themselves usually follow suit with each other. Also, since your cards are now “maxed-out”, that initial teaser rate may now be raised to 18% or higher because you now seem like a higher risk of default.
There is a way to correct this if it has happened to you. Feel free to call me for a proven script that will raise your limits to what they once were but keep in mind, you may have to re-qualify for that limit by providing proof of employment and updated financial information.
I have had several clients in the last 3 weeks that have been victims of this practice but have since had their limits restored.
Cordially,
J. Michael Nash
Financial Strategist
The Michael Nash Group
1911 Rio Grande
Austin, Tx 78705
(512) 494-0300 office
(512) 494-0301 fax
(512) 731-8818 mobile
"Good, Better, Best! Never let it rest! Never let it rest until GOOD gets BETTER and better gets BEST!"
case design - 401k reroute
The client is 41 years old and looking for a way to get his family's retirement plan on track. They have a house with a fair market value of $500,000 and a current mortgage balance of $200,000. The current mortgage is a 30 year amortized loan with a payment of $1,200. The husband and wife each have IRA's with a combined balance of $53,300 that have experienced recent losses due to the market. They are concerned about leaving these investments in such a volatile market and would like more safety and security.
The client also has a current 401(k) balance of $63,000 and is contributing 10% of their salary. A credit card balance of $9,500 is carried and they are making payments of $250 per month. For this case we proposed a plan that is utilizing equity in the house along with repositioning qualified funds into a tax favored IUL. A home equity line of credit was used to separate $100,000 of their home equity. Although this increases their current mortgage payments, we were able to offset the increase by redirecting current cash flows and contributions. They are only matched on 5% of their 401(k) contributions, but are contributing the 10%. To allow them to continue to take advantage of the company match of 5% - the non matched contributions were redirected. With them being currently employed by the company they are not able to access the 401(k) balance.
To get rid of their non tax deductible, non preferred debt, the credit card balance was paid off with the current contributions redirected into the plan.
Their current term policy of $250,000 was replaced because we were able to provide substantially more death benefit with this new plan.
The client was fearful about their current IRA's in the market that have declined in value. To provide guarantees the IRA balance was rolled out over a five year deposit period. The new increased mortgage deduction from the HELOC helped to offset the taxes and penalties of the strategic roll-out.
We were able to show the client how they can have a positive cash flow and generate tax free income. The client felt relieved that they had a structured plan that can supplement their 401(k) and provide such favorable tax advantages. He is the breadwinner of the house and now his wife is secure in knowing that she will be taken care of if something happens. At age 65 this plan is able to generate a tax free income stream of $69,280 that will last into perpetuity.
Please call me anytime at (512) 494-0300 as I am always available to assist you in implementing strategies that will save you thousands of dollars in taxes over your lifetime and will provide a "perpetual" income stream.
-J. Michael Nash-
Financial Strategist
The client also has a current 401(k) balance of $63,000 and is contributing 10% of their salary. A credit card balance of $9,500 is carried and they are making payments of $250 per month. For this case we proposed a plan that is utilizing equity in the house along with repositioning qualified funds into a tax favored IUL. A home equity line of credit was used to separate $100,000 of their home equity. Although this increases their current mortgage payments, we were able to offset the increase by redirecting current cash flows and contributions. They are only matched on 5% of their 401(k) contributions, but are contributing the 10%. To allow them to continue to take advantage of the company match of 5% - the non matched contributions were redirected. With them being currently employed by the company they are not able to access the 401(k) balance.
To get rid of their non tax deductible, non preferred debt, the credit card balance was paid off with the current contributions redirected into the plan.
Their current term policy of $250,000 was replaced because we were able to provide substantially more death benefit with this new plan.
The client was fearful about their current IRA's in the market that have declined in value. To provide guarantees the IRA balance was rolled out over a five year deposit period. The new increased mortgage deduction from the HELOC helped to offset the taxes and penalties of the strategic roll-out.
We were able to show the client how they can have a positive cash flow and generate tax free income. The client felt relieved that they had a structured plan that can supplement their 401(k) and provide such favorable tax advantages. He is the breadwinner of the house and now his wife is secure in knowing that she will be taken care of if something happens. At age 65 this plan is able to generate a tax free income stream of $69,280 that will last into perpetuity.
Please call me anytime at (512) 494-0300 as I am always available to assist you in implementing strategies that will save you thousands of dollars in taxes over your lifetime and will provide a "perpetual" income stream.
-J. Michael Nash-
Financial Strategist
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