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Business Owner - Mid Stage Planning


Business owner, age 50 has recently sold business. Has lump sum after taxes of - $700,000

Have total of $1,100,000 to be his retirement with no more contributions.


Retirement is to start at age 60 and needs to last at least 25 years.


Utilize multiple asset classes so that investments participate in different scenarios, not all the same. Provide flexibility to make changes without incurring penalty for  change.

Employ tax deferred, taxable and never taxed again asset buckets. Install private pension and flexible retirement  benefit programs.


Asset Management:

Utilize two asset management programs (IRA & taxable investment funds)

  • Strategic- investment manager managed program based on owner's investment profile (risk assessment). Focus is on allocation where being in the market is long term more favorable than timing.
  • Tactical management - asset management program that has 4 recommended components, from aggressive too conservative in different percentages. Some program are tracking leaders, others are in/out  depending on up/down market perspective.   Goal is to NOT be relational to general market (S&P 500) movement.


Utilize Indexed universal life cash accumulation product.

Overfund product so that cash is invested in indexed based program. Potential Tax free loan provisions will provide income after retirement. Indexed feature provide up or over investment returns.

Income feature is flexible in amounts, timing and on/off.


Utilize annuity with income rider option.

Rider provides guarantee of growth for income stream purposes.

Income stream is guaranteed in that once started will continue as long owner is alive.


Asset Management

  • Strategic $300,000
  • Tactical $300,000

Life $250,000 ($50,000 / year over 5 years) Annuity $250,000


At age 60, begin withdrawals from Asset management@ $90K IRA and $60K taxable investment.

At age 65, lower IRA to $4SK, lower investment account to $1SK, turn on annuity to $47K and life insurance @ $49K. (Funds received from the life insurance policy are limited to prevent taxation, preclude policy expiration and to ensure the policy pays a death benefit.)

This is a hypothetical example and is not representative of any specific situation. Your results will vary.

Both loans and withdrawals from a permanent life insurance policy may be subject to penalties and fees and, along with any accrued loan interest, will reduce the policy's account value and death benefit. Withdrawals are taxed only to the extent that they exceed the policy owner's cost basis in the policy and usually loans are free from current Federal t axation . A policy loan could result in tax consequences if they policy lapses or is surrendered while a loan is outstanding.

Tactical allocations involve more frequent buying and selling of assets and will tend to general higher transaction cost. Investors should consider the tax consequences of moving positions more frequently.

Riders are additional guarantee options that are available to an annuity or insurance contract holder. While some riders are part of an existing contract, many other may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.

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