60-year-old Divorcee Wants $8,000/month of Guaranteed Income in 2 Years (plus a $20k/year travel budget for 6 years)

(don’t forget to checkout the video of this case study too)

💾 be sure to save for later 💾

⭐️ Here are the details ⭐️

✅ Rochelle is 60

✅ She wants $8,000/month of retirement income in 2 years

✅ She has $400k of long-term care coverage (that will also double as a tax-free benefit to her loved ones if not used for LTC)

✅ She has $400k in recently matured CD’s

✅ She has $550k in her 401k (that she maxes out)

✅ She will collect $1800/month from her ex’s Social Security in the form of a Spousal Benefit at 62

✅ She will bring home $3,000/month of part-time income from a garden center

✅ Her small pension will pay $2,000/month after taxes at 62

⭐️ Principal Protection + Guaranteed Interest Strategy ⭐️

✅ $400k from CD’s into an 8-year, guaranteed rate annuity at 5.50% per year (based on rates from July 2024)

✅ This will be worth $445,210 in 2-years at retirement

✅ She will then take interest payments for 6 years of $2,041 per month (without touching the principal)

⭐️ 401k Withdrawals @ 4% Per Year (ages 62–68) ⭐️

✅ At Retirement (62) Rochelle will have $682,503 in her 401k

✅ She can comfortably withdrawal $2,275/month from 62–68

This means her total income from 62–68 =

$1800/month spousal benefit

➕ $3,000/month part-time income

➕ $2,000/month pension

➕ $2,041/month in interest payments from fixed annuity

➕ $2,275/month flexible 401k withdrawals

Total 🟰 $11,116/month

(or $9,000/month + $25,392 per year for travel)

⭐️ Stage 2 — Stops Part-time Work & Annuity Matures ⭐️

✅ Rochelle’s interest payments stop & she receives her $400k back (plus interest earned the first 2 years)

✅ Her 401k is still worth approximately $682k

✅ She loses her $3,000/month part-time income

Total replacement income need = approximately $5,000 per month

✅ Step 1: $400k from 401k into lifetime income annuity for $2,800/month

🌟 This adequately covers her RMD’s on her 401k & provides lifetime income

✅ Step 2: Take a 4–5% income withdrawal from remaining assets each year to provide additional $2200-$2800/month

🌟 She will take 4% annual income withdrawal and more when the market does well

This gives her approximately $8,800 per month of guaranteed, lifetime income

➕ additional funds when the market does well (without the risk of running out of money)

Let’s chat 💬😎