Cover Your Basic Expenses: Protected Lifetime Income For Essential Expenses
CASE STUDY: RETIRED WOMAN
- Lives in Florida
- 70 years old
- $400,000 in assets
EXPENSES BASED ON FLORIDA AVERAGES AND ASSUMPTIONS
- Rental in Florida: $11,220 ($933/mo)
- Utilities: $3,000 ($250/mo)
- Annual Groceries Cost: $2,800 ($233/mo)
- Health Insurance Cost: $5,500 ($458/mo)
- Transportation Spending: $2,200 ($183/mo)
TOTAL BASIC EXPENSES: $24,700 ($2,058/mo)
Social Security: $18,600 ($1,550/mo)
SHORTFALL: $6,100 ($508/mo)
ADD AN ANNUITY TO COVER YOUR BASICS
If she purchases an annuity for $100,000 (25% of her assets), it could generate protected life- time income of $6,211 ($517/mo).1 She will cover her BASICS so she doesn’t have to worry about her current basic living expenses, and she still has $300,000 in probable income to withdraw to pay for other expenses.