Method for maximizing retirement income using financial bridge products and deferred social security income

• US 20040158517A1
• Filed: 02/06/2004
• Published: 08/12/2004
• Est. Priority Date: 02/06/2004
• Status: Abandoned Application

• Current Assignee: Prudential Insurance Company of America (Prudential Financial Incorporated)
• Original Assignee: Prudential Insurance Company of America (Prudential Financial Incorporated)
• Inventors: Carlson, Peter C., Mahaney, James I.
• Application Number:
  US10/774,058
• Publication Number:
  US 20040158517A1
• Time in Patent Office: Days
• US Class Current: 705/36
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

The present invention provides a method for maximizing retirement income using bridge annuities and deferred Social Security income. Financial information about a client is gathered, in addition to financial information about the client'"'"'s spouse, if applicable. A variety of income scenarios are modeled using the financial information and a plurality of income models, each model including income from a bridge product and deferred Social Security income. Alternate funding approaches are projected using the financial information, and the modeled scenarios are compared to the alternate funding approaches to determine the optimal scenario for maximizing retirement income. The client can then purchase a bridge product in accordance with the optimal scenario.

Claims

1. A method for maximizing retirement income comprising:

gathering information about a client;

projecting retirement income for the client in a bridge scenario;

calculating an alternate retirement funding approach;

comparing projected retirement income from the bridge scenario to the alternate retirement funding approach; and

allowing the client to select a retirement plan based upon the projected retirement income.

2. The method of claim 1, wherein the step of projecting retirement income for the client comprises projecting retirement income using a bridge product and deferred Social Security income.

3. The method of claim 2, wherein the bridge product comprises a bridge annuity.

4. The method of claim 2, wherein the bridge product comprises a Funding Agreement Note Issuance Program.

5. The method of claim 2, wherein the bridge product comprises a settlement option under a deferred annuity.

6. The method of claim 2, wherein the bridge product comprises a mutual fund.

7. The method of claim 2, wherein the bridge product comprises a certificate of deposit.

8. The method of claim 2, wherein the bridge product comprises a bond.

9. The method of claim 2, wherein the bridge product comprises fixed income.

10. The method of claim 2, wherein the bridge product comprises a retail note.

11. The method of claim 1, wherein the step of projecting retirement income further comprises projecting temporary income during retirement.

12. The method of claim 2, wherein the step of projecting retirement income further comprises:

deferring Social Security income for a client when the client retires and until a delayed receipt age;

providing income from the bridge product when the client retires and until the delayed receipt age; and

exhausting income from the bridge product and allowing the client to receive deferred Social Security income when the client reaches the delayed receipt age.

13. The method of claim 2, wherein the step of projecting retirement income for the client comprises projecting retirement income for a primary beneficiary and a spouse using a bridge product and deferred Social Security income.

14. The method of claim 13, further comprising:

allowing a spouse to receive the spouse'"'"'s own Social Security income when the spouse retires;

deferring Social Security income for the primary beneficiary from when the primary beneficiary retires until a delayed receipt age;

providing income from the bridge product from when the primary beneficiary retires until the delayed receipt age; and

exhausting income from the bridge product and allowing the primary beneficiary to receive deferred Social Security income from when the primary beneficiary reaches the delayed receipt age.

15. The method of claim 14, further comprising allowing the spouse to receive a spousal Social Security benefit when the primary beneficiary reaches a full retirement age.

16. The method of claim 14, further comprising allowing the spouse to receive a spousal Social Security benefit when the spouse and the primary beneficiary reach a full retirement age.

17. The method of claim 13, further comprising:

allowing the spouse to receive the spouse'"'"'s own Social Security income when the spouse reaches a full retirement age;

deferring Social Security income for the primary beneficiary from when the primary beneficiary retires until a delayed receipt age;

providing income from the bridge product from when the primary beneficiary retires until the delayed receipt age; and

exhausting income from the bridge product and allowing the primary beneficiary to receive deferred Social Security income from when the primary beneficiary reaches the delayed receipt age.

18. The method of claim 17, further comprising allowing the spouse to receive a spousal Social Security benefit when the primary beneficiary reaches a full retirement age.

19. The method of claim 13, further comprising:

deferring the spouse'"'"'s own Social Security income from when the spouse retires until a first delayed receipt age;

deferring the primary beneficiary'"'"'s own Social Security income from when the primary beneficiary retires until a second delayed receipt age;

providing income from a spousal bridge product from when the spouse retires until the first delayed receipt age;

providing income from a primary bridge product from when the primary beneficiary retires until the second delayed receipt age;

exhausting income from the spousal bridge product and allowing the spouse to receive the spouse'"'"'s own Social Security income at the first delayed receipt age; and

exhausting income from the primary bridge product and allowing the primary beneficiary to receive the primary beneficiary'"'"'s own Social Security income at the second delayed receipt age.

20. The method of claim 19, further comprising allowing the spouse to receive a spousal Social Security benefit when the primary beneficiary reaches a full retirement age.

21. The method of claim 1, wherein the step of projecting future income comprises:

determining parameters for the bridge scenario;

tallying income sources for each year in bridge scenario;

calculating Social Security income contributions to income for each year in the bridge scenario;

discounting Social Security income contributions from a delayed Social Security receipt age to a retirement date using an inflation assumption;

calculating gross bridge product payments necessary to match the discounted Social Security income; and

wrapping bridge product payments around the discounted Social Security income.

22. The method of claim 21, further comprising re-calculating the bridge scenario using an earlier delayed Social Security receipt date or a later retirement date.

23. The method of claim 22, further comprising discounting pre-tax Social Security income contributions from a delayed Social Security receipt age to a retirement date using an inflation assumption.

24. The method of claim 21, further comprising discounting after-tax Social Security income contributions from a delayed Social Security receipt age to a retirement date using an inflation assumption.

25. The method of claim 1, wherein the step of allowing the client to select a retirement plan further comprises allowing the client to purchase a deferred annuity prior to retirement.

26. The method of claim 2, further comprising determining a target amount for the bridge product prior to retirement and allowing the client to purchase one or more investment vehicles to achieve the target amount.

27. A method for maximizing retirement income for a client comprising:

providing the client with a bridge product providing income from a retirement date until a delayed Social Security receipt age;

allowing the client to defer Social Security income from when the client retires until the delayed Social Security receipt age;

providing income from the bridge product from when the client retires until the delayed receipt age; and

exhausting income from the bridge product and allowing the client to receive deferred Social Security income from when the client reaches the delayed receipt age.

28. The method of claim 27, further comprising providing income from the bridge product prior to the client'"'"'s retirement.

29. A method for maximizing retirement income for a married client comprising:

providing the client with a bridge product providing income from a primary beneficiary'"'"'s retirement date until a delayed Social Security receipt age;

allowing the spouse to collect the spouse'"'"'s own Social Security income from when the spouse retires;

deferring Social Security income for the primary beneficiary from when the primary beneficiary retires until the delayed Social Security receipt age;

providing income from the bridge product from when the primary beneficiary retires until the delayed Social Security receipt age; and

exhausting income from the bridge product and allowing the primary beneficiary to receive deferred Social Security income when the primary beneficiary reaches the delayed Social Security receipt age.

30. The method of claim 29, further comprising allowing the spouse to collect a spousal Social Security benefit when the primary beneficiary reaches a full retirement age.

31. The method of claim 29, further comprising allowing the spouse to collect a spousal Social Security benefit when the spouse and the primary beneficiary reach a full retirement age.

32. The method of claim 29, further comprising providing income from the bridge product prior to the primary beneficiary'"'"'s retirement.

33. A method for maximizing retirement income for a married client comprising:

providing the client with a bridge product providing income from a primary beneficiary'"'"'s retirement date until a delayed Social Security receipt age;

allowing the spouse to collect the spouse'"'"'s own Social Security income from when the spouse reaches a full retirement age;

deferring Social Security income for the primary beneficiary from when the primary beneficiary retires until a delayed receipt age;

providing income from the bridge product from when the primary beneficiary retires until the delayed receipt age; and

exhausting income from the bridge product and allowing the primary beneficiary to receive deferred Social Security income when the primary beneficiary reaches the delayed receipt age.

34. The method of claim 33, further comprising allowing the spouse to receive a spousal Social Security benefit when the primary beneficiary reaches a full retirement age.

35. The method of claim 33, further comprising providing income from the bridge product prior to the primary beneficiary'"'"'s retirement.

36. A method for maximizing retirement income for a married client comprising:

providing the client with a spousal bridge product and a primary bridge product;

deferring the spouse'"'"'s own Social Security income from when the spouse retires until a first delayed receipt age;

deferring the primary beneficiary'"'"'s own Social Security income from when the primary beneficiary retires until a second delayed receipt age;

providing income from the spousal bridge product from when the spouse retires until the first delayed receipt age;

providing income from the primary bridge product from when the primary beneficiary retires until the second delayed receipt age;

exhausting income from the spousal bridge product and allowing the spouse to receive the spouse'"'"'s own Social Security income at the first delayed receipt age; and

exhausting income from the primary bridge product and allowing the primary beneficiary to receive the primary beneficiary'"'"'s own Social Security income at the second delayed receipt age.

37. The method of claim 36, further comprising allowing the spouse to receive a spousal Social Security benefit when the primary beneficiary reaches a full retirement age.

38. The method of claim 36, further comprising providing income from the primary bridge product prior to the primary beneficiary'"'"'s retirement.

39. The method of claim 36, further comprising providing income from the spousal bridge product prior to the spouse'"'"'s retirement.