Case Study $100,000 Investment

[Msann]

I have a family member that is anticipating a settlement in the next few months. He anticipates needing to invest $100,000 into some retirement vehicle. He has two single family properties that were purchased about 5 years ago for retirement nest egg and that is it, no 401K, etc.
How to invest the $100,000 is the question---age 62 in good health looking to work for another 8 years and is self-employed. I only work with senior health products so I am of no value on this topic.

 

[tins]

Buy another house.
Rent it out for 8 years, making some income, but building equity.

Although I'm 31, this is my plan. Also, in search of my 3rd home. I trust property more than stocks, bonds, CDs, etc.

 

[Msann]

Interesting comment on buying the third house, he already has that covered so we're still at $100,000 to invest.

 

[Sales71]

Interesting comment on buying the third house, he already has that covered so we're still at $100,000 to invest.

Great Question. Maybe he want to protect the 100k a single pay annuity would be a good choice for him like tin said a house would be good as well but that is already covered. An Index annuity that follows the S&P500 would do the trick. It only goes up if the market is up for that year and never goes down.

 

[nyc2phi]

a variable annuity might be the right product for this guy.

Most guarantee at least 5% or the upside of the market.


These products are designed for safety since it has the guarantee which make it a decent choice for someone a few years out of retirement.

 

[jacobtn]

I have a family member that is anticipating a settlement in the next few months. He anticipates needing to invest $100,000 into some retirement vehicle. He has two single family properties that were purchased about 5 years ago for retirement nest egg and that is it, no 401K, etc.
How to invest the $100,000 is the question---age 62 in good health looking to work for another 8 years and is self-employed. I only work with senior health products so I am of no value on this topic.

Well he doesn't have a lot of cash to put in something, and with him having no other savings that limits his options. Ideally if he doesn't need the money an annuity with an income rider would give him around double whatever he puts in now in 8 yrs, for an income stream (not cash value but income value). $200,000 at 3.5% would be around $600 per mth he could withdraw monthly for life. The problem would be suitability if he has no savings that would probably not work unless he used a portion of the $100k and kept the other liquid.

Another option would be a MYGA but they are only paying 3% max on 7 yrs so I don't think that's a good option here if he doesn't need the money until he's 70.
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a variable annuity might be the right product for this guy.

Most guarantee at least 5% or the upside of the market.


These products are designed for safety since it has the guarantee which make it a decent choice for someone a few years out of retirement.

Sorry but a VA would be the last place I'd put this guy. There is zero safety unless you are talking about the death benefit rider, where they charge him fees to take out his own principal over 15 years when the market crashes.

 

[VolAgent]

Sorry but a VA would be the last place I'd put this guy. There is zero safety unless you are talking about the death benefit rider, where they charge him fees to take out his own principal over 15 years when the market crashes.

Put an income rider on it, just like a FIA. But I definitely wouldn't explain it that way. The way NYC said it, you might think you get to walk with that money, which you don't.

 

[Msann]

Quick clarification on the scenario, he has an ongoing income stream through self employment for the next 8 years. Probably putting up 1/3rd of the settlement for investment the rest of the settlement is going to pay off debt, new business opportunity and obtain the 3rd property.

 

[newtothegames]

i have a family member that is anticipating a settlement in the next few months. He anticipates needing to invest $100,000 into some retirement vehicle. He has two single family properties that were purchased about 5 years ago for retirement nest egg and that is it, no 401k, etc.
How to invest the $100,000 is the question---age 62 in good health looking to work for another 8 years and is self-employed. I only work with senior health products so i am of no value on this topic.

what state is he in?

 

[Msann]

Thanks for all the feedback, I am wondering if he should go for 2 additional properties rather than 1 and call it a rap bringing his nest egg holdings up to 4 investment properties. I think with the crash he is very concerned about putting all his hopes in real estate though, current holdings have not fully recovered.
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He resides in Georgia but has been toying with retiring in Costa Rica.