I was meeting with a financial planner the other day who told me about a client who had done something unique. I found it kind of hard to believe and would like to run it by this forum to see if others thought this could be done.
Evidently her client bought a ton of Google before its prime. He ended up making a couple million by the time he sold out. About 10 years before he decided to retire he bought a lifetime annuity with $1 mill. The terms were that he would be paid $100,000 a year for the rest of his life and obviously if he dies, the payments stop. Because he didn't need the money yet, each year he pocketed the $100,000 for the next 10 years and thus had his $1 mill back and collected $100,000 a year still from the insurance company.
Has anyone ever heard of doing this with an annuity? I'm just wondering why an insurance company would agree to these terms? If it is realistic, it may be something I look into when I first get a hold of $1 mill (whenever that will be ). Now the guy has all his money and is getting paid the 100K/year. Smart, dumb, or unrealistic?
Thanks!
Evidently her client bought a ton of Google before its prime. He ended up making a couple million by the time he sold out. About 10 years before he decided to retire he bought a lifetime annuity with $1 mill. The terms were that he would be paid $100,000 a year for the rest of his life and obviously if he dies, the payments stop. Because he didn't need the money yet, each year he pocketed the $100,000 for the next 10 years and thus had his $1 mill back and collected $100,000 a year still from the insurance company.
Has anyone ever heard of doing this with an annuity? I'm just wondering why an insurance company would agree to these terms? If it is realistic, it may be something I look into when I first get a hold of $1 mill (whenever that will be ). Now the guy has all his money and is getting paid the 100K/year. Smart, dumb, or unrealistic?
Thanks!