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Whether an "inflection point" in the U.S. housing market is coming, we don't know.However, many families choose to be in highSell houseCash out and start preparing for retirement income.
One of the most common questions asked by people who want to retire, or who are approaching retirement, is,"I have a sum of money. How can I make this money generate a lifetime monthly income? How much can I get every month?"
In this article, TheLifeTank©️ in community agencyHummingLife(Hummingbird Life) with the help of case data sharing, will help retirement planning or FIRE family answer the following two hot topics:
- The Two Most Common Lifetime Income Cash Flow Scenarios
- Comparison of two lifetime income cash flow options
/ case description /
In a specific case, Mr. Gao, a male resident in his late 60s, recently sold his California investment property for a net gain of about $100 million after all costs and taxes.
Mr. Gao said that he hopes to retire completely after the epidemic is over and travel the world with his family.He made it clear that he did not want to spend the same time and energy dealing with tenants, repairing and maintaining this investment property after the age of 60 as in the past.
So what financial options does Mr. Gao have to use his $100 million assets to provide him with a lifetime of income?
4. Retirement Plan XNUMX: Retirement XNUMX% Rule
In TheLifeTankRetirement Savings ColumnIn the American Life Insurance Guide Network©️ in the form of a column, it introduces the common "How much does it cost to retire in the US?What is the 4% rule for retirement?"
For Mr. Gao,The 4% rule is one of the most frequently recommended ways of managing retirement assets by financial advisors.
The 4% rule for retirement specifically means that, according to research on historical data,As long as retirement assets—in this article, the money earned from selling a house—is 50% in stocks and 50% in bonds, then on average,Withdraw 4% of the initial funds each year.This money can provide us with lifetime retirement income for a lifetime.
(©️Investing.com 4/50 portfolio corresponding to the 50% rule)
The 4% rule for retirement: $3,333 a month
The sale price of 100 million, using the 50/50 rule,A 60-year-old investor can receive $4 a year, with an average monthly income of $3,333.
According to this algorithm, at the age of 85, you just received $100 million, that is to say,In 25 years, when Mr. Gao was 85 years old, the principal was withdrawn.Contributions will continue this way until the principal is exhausted.
(>>>Related reading:Inflation impacts retirement 4% rule, how much does 100 million retirement assets shrink each year?)
XNUMX. Retirement Plan XNUMX: Lifetime Income Insurance
For most U.S. households with savings in retirement accounts,Another major way is to use income annuity insurance.
Income annuity, which means that the insured will pay a sum of money, such as the money received after selling the house,A one-time investment to the insurance company.After that, the insurance company pays the policyholders pensions on a monthly or yearly basis in the form of an annuity contract.This is similar to the concept of "collection in full", which can be collected for a lifetime.
This is also the "commercial pension insurance" familiar to the public.It is an insurance product designed to provide guaranteed pension income for retirees.
Commercial pension insurance: $6,100 per month
After the sale proceeds are used for income insurance,How much money you can receive every month has nothing to do with the brand of the insurance company.It mainly depends on the following two points:
- The current benchmark interest rate in the market
- Asset management level and profitability expectations of insurance companies
It is generally believed that the pension insurance of asset management life insurance companies has higher income than the pension insurance of protection life insurance companies. ——Heather Xiong CFP®️
AdoptingA+ credit ratingAfter the insurance company plan, a 60-year-old male investor, 100 million yuan for the sale of the house, purchased income annuity insurance,You can receive $7 per year, and the average monthly income is about $3 per month.
According to this interest rate, when I was 74 years old, I just received $100 million, that is to say, Mr. GaoAfter 14 years of receiving it, when he turned 74, the principal was withdrawn.Contributions will continue in this way until Mr. Gao's death.
A summary and comparison of two retirement financing methods
*This icon is for job education description only, not an insurance contract offer and quotation.This data comes from the market interest rate value of HummingLife 2022/05/15, please consult a professional life insurance financial advisor for actual income changes)
Article summary
in the text,American Life Insurance Guide©️From the perspective of specific case analysis, it shows the income comparison of different retirement financial plans.
However, although the numbers are objective and rational, for a traditional family whose "house" plot is rooted in blood, it may be more like accepting a subjective challenge in thinking and philosophy.
Visible bricks and cement, and invisible virtual financial assets,The difference between the two is not "heavyness", but can be summed up in simple words like "fluidity" and "efficiency".
In the comparison of this article, different financial management choices also bring about completely different income amounts.
TheLifeTank.comThe purpose of the column is to introduce different retirement financial management methods in American society, as well as the corresponding data support.None of these methods are good or bad.
"Peace of mind is the place to go", choosing a retirement financial management method that makes you and your family feel at ease and comfortable, and enjoying a leisurely retirement life every day is the ultimate goal of every family's retirement financial management. (End of full text)
(>>>Recommended reading:Where do Americans go to care for?Ranking of 10 affordable retirement cities in the U.S. and rent prices )
(>>>Recommended reading:How to use life insurance to increase our income after retirement?）
(>>>Recommended reading:What exactly is the "bucket strategy" for retirement pensions?Is it the best retirement cash withdrawal strategy?）
