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See Notes Below
Using his assumed rate of growth,
let's set up a strategy to withdraw 8% of the annuity
balance every year and leave him with a $231,482 constant balance
to satisfy his liquidity concerns.
The software has calculated an amount that can be withdrawn at
the beginning of the first year which will be equal to 8% of his
balance every year thereafter. That amount is $18,518 per year.
After deducting $5,185 for income tax, there is $13,333 which
will pay the premium on a $888,866 last survivor policy. Now, at
the death of the last survivor, the heirs get $888,866, plus the
remaining deferred annuity balance net to heirs of $209,115 for a
total of $1,097,981. The bar charts illustrate the difference. |
