For
some individual over-achievers, they make a substantial income in just one or a
few years. While they may well repeat it for many years to come, they also may not,
depending on injury, competition or other circumstances of life. For them, securing
an income for life over a short period of time is important in giving them the confidence
to continue pushing the envelope.
The one-pay pension plan may be suitable, though it can be funded over more than
one year if that is more suitable for cash flow and meeting other financial objectives.
As an example, and using an assumed rate of return of just six percent, a 25 year
old could deposit $1 million in a single year, shelter the entire amount from tax
on subsequent growth, and plan for an income flow of $70, 000. from age 35 on. The
tax-free income makes it the equivalent of a pension of about $100, 000./ year.
While other plans ran out at age 71, this plan still had $2M + at age 90.
This
could be ideal for a professional athlete, in which case planning may well include
integration with a personal services corporation and Retirement Compensation Arrangement
(see article on RCAs) or a stand-alone investment opportunity to protect earning
power.
The available tax-free payout in the event of disability can make this a great way
to provide added protection as well. For young business owners who do well on their
IPO, this can also be a good fit, as everything else is gravy, and they can focus
on their next big project, without worrying about having a nest egg for their future.
Again, this would probably be integrated with one or more of the programs we offer
for business owners.
For actors and musicians, this is also a great way to provide for the long term
without worrying about the next gig or whether audiences will turn fickle with the
next face or sound.
Strategic
Edge works directly with your agent, accountant, lawyer, and other trusted advisors,
ensuring the best possible value and all of the relevant information to assist the
other people you work with and trust. We don't replace existing talent; we add to
it, and we enhance it.
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