Planning for the future is not always easy, yet it is necessary in order to prepare your loved ones for the future and impart the maximum percentage of your assets to your beneficiaries. While there are many wealth management plans available, many do not provide the income necessary to support the individual covered by the plan during their life. At David M. Jones & Associates, we are here, as wealth management experts, to help you make the most out of your finances. That’s why we have designed the “Max Plan” to assist you in managing your income and increasing your rate of return.
The “Max Plan” significantly increases income on a mostly tax-free basis and provides you with guaranteed income for the rest of your life. With the “Max Plan,” assets producing a low rate of return (i.e. bonds) are sold in order to purchase immediate annuity. An immediate annuity, is an agreement between you and the insurance company to provide you with guaranteed income for the rest of your life. The annuity has a high payout because it is returned to you in the form of principal and interest. This is beneficial because an annuity is usually not affected by income tax because most of the payments are considered a return of principal. Since this type of annuity is guaranteed only during the annuitant’s life; upon death, these annuity payments will disappear. Therefore, the “Max Plan” capitalizes on this lifetime income and puts the earnings toward a different investment. Using part of the income generated by the annuity payouts, you would purchase a life insurance policy to replace the loss of the initial investment used to purchase the annuity. For example, let’s say that you invested $100,000 to purchase an immediate annuity. From the payouts that you receive from the annuity, you would use part of that income to pay the insurance premium of a $100,000 life insurance policy.
This plan is an ideal financial strategy for healthy men or women, aged 70-85, that are dependent on a monthly income or concerned about outliving their savings. With a minimum investment of $100,000, the “Max Plan” has enabled individuals to consistently realize a 4.5 to 6.5 percent net rate of return, which is significantly higher than many other current investment options. Your loved ones will also benefit from this investment strategy because the life insurance will be income and possibly estate tax free to your beneficiaries.
For more information about the David M. Jones & Associates “Max Plan” check out this video on our YouTube channel, which provides a great comparative example that will help you see how the “Max Plan” can positively impact your insurance coverage. To see specifically how the “Max Plan” can affect your income based on your tax bracket, schedule a free consultation at our Florida or California office.