Transamerica Financial Advisors, Inc.
Investment Advisor Representative
Ryan Bennett is an Investment Advisor Representative with a visionary outlook on the future of the financial industry. His focus is on building and leading an agency that can help people from all walks of life, regardless of their life stage or income stage. From new families who are unsure where to start, to baby boomers at or near retirement, to professionals who make really good money but also spend a lot of money, Ryan’s passion is fulfilling his transcendent role as an advisor to his clients and as a mentor to his team.
He began his career with a large communications company in 2004 where he was entrusted with managing multi-million dollar projects and leading large teams to deliver results impacting Wall Street. In 2013, he joined Transamerica Financial Advisors, Inc. to assist with bringing investment and professional money management services typically reserved for the very wealthy to middle-income families.
Ryan is both a Registered Representative as well as an Investment Advisor Representative and holds FINRA Series 6, 63, and 65 securities registrations with Transamerica Financial Advisors (CA Insurance Lic. #0I47162). Furthermore, he holds a Variable Annuity Contract License through the California Department of Insurance and a non-resident Insurance License in nine other states as well. Ryan holds a Bachelor's of Science in Computer Science and Engineering from UCLA and has completed studies toward an MBA from California Lutheran University in Thousand Oaks, CA.
He resides in Camarillo, California with his wife, Hilary, and their three children, Emmalyn, Zachary, and Jaxon. He enjoys golf, baseball, and singing.
BS, Computer Science & Engineering, UCLA
Assets Under Management:
Transamerica Financial Advisors, Inc. financial professionals may only transact business in states where they are registered. Any individual communication trying to effect a transaction in securities or the rendering of personalized investment advice for compensation will not be made to persons in states where the financial professional is not registered.
Securities and Investment Advisory Services offered through Transamerica Financial Advisors, Inc. (TFA) - Member FINRA, SIPC, and Registered Investment Advisor. TFA1877350-09/17
First of all, let me begin by offering my most sincere condolences to you and your family as you navigate the twists and turns of the grief that has come bum-rushing into your life as a result of the loss of your husband. I simply cannot even imagine what you must be going through right now. If it is of at least some small token of conciliatory encouragement, I am here to tell you that financially you are going to be okay. This is the moment that life insurance was designed for. Your husband took the time and energy necessary to ensure you will still be provided for in ways that he would have wanted you to be provided for, no matter what!
It is prudent of you to inquire as to the right place to put this money, because it is an incredibly important decision. I believe the ultimate decision of exactly where to put the money is one that should be made on the basis of recommendations from a financial professional such as myself, but only after a personalized comprehensive financial review is completed one-on-one (I call this a "Financial Needs Analysis"). There are a myriad number of ways to "configure" and tailor the options I'm listing below so it is very important to work with someone you feel you can trust (and who is obligated to act with your best interest first).
Some of the most common places to put the money include:
- Bank account (money market, CD, savings, checking, etc.) - low rate of return, low risk, earnings are typically taxable
- Stocks and Bonds - potentially greater rate of return, potentially greater risk, earnings are typically taxable and distributions are potentially taxable (if there are gains)
- Cash Value Life Insurance - potentially greater rate of return, potentially low risk, earnings are not typically taxable and distributions are not typically taxable
- Annuity - potentially greater rate of return, potentially low risk, earnings are not typically taxable, distributions are typically taxable
I also want to offer you some commentary on the key financial concepts to consider and also some questions to ask yourself that should help point you in the right direction when evaluating options in the aforementioned categories above.
1) Purpose - every dollar should "have a name on it." If you don't have a plan for what you will use this money for (e.g. living expenses, travel, children, etc.) then that is the most important thing you need to take some time to decide FIRST. A common goal is to replace income with the large sum of money. For example, invested properly, a life insurance check of $500,000 might yield 5% annually. This 5% annual figure would equate to $25,000 or a little over $2,000 a month of "income replacement." Deciding the purpose of these funds in your plan will have the biggest impact on ultimately what makes the most sense to do with this money. What are your priorities? What is currently missing from your plan outside of this new sum of money?
2) Time Horizon - how soon do you want, need, or plan to use some or all of this money? Most clients I work with find it easiest to think in 5-year "buckets." It will make sense to spread the money between each of those buckets. How much of this money do you want to put in each 5-year bucket?
3) Rate of Return - consider inflation on average is estimated to be somewhere between 2 to 3 percent every year. If you put this money in the bank, where the typical savings or checking account is well below this figure, inflation will actually cause you to "lose" money. You should have a goal of earning at least 4% on your savings to outpace inflation and actually grow the funds. What rate of return are you currently earning on your other accounts?
4) Taxes - remember that not all strategies are created equal when it comes to how you have to (or don't have to) pay taxes. Fortunately, a life insurance benefit is not taxable up-front. However, depending upon where you invest the money, you may be required to pay taxes on the growth of that account and/or the distributions from that account. Remember to factor in taxes when comparing fees on different investment options. Taxes in many cases are the highest "fee" that you'll have to pay on your money.
5) Risk - Remember the "paradox of money." If you lose a certain percentage on your investment, takes an even greater percentage gain to get back the money you lost. For example, if you invest $10,000 in something that could lose 50% in one time period, then you'd need to earn 100% on the remaining $5,000 to get back to the $10,000 you started with. A 100% gain to a 50% loss. How much potential loss are you really comfortable with? How much potential loss can you afford, based upon the purpose you have in mind for these funds?
Have you considered a QLAC (qualified longevity annuity contract)?
QLAC is a special type of annuity that is only recently available due to special tax code legislation in 2014.
It provides a way to keep more of your retirement savings untouched and enjoying tax-free growth rather than taking RMDs on the entire nest egg subject to RMDs.,
If you are unfamiliar with a QLAC, the long and short of it is this. A QLAC allows the insured to withdraw 25% -- up to a maximum of $125,000 for single and $250,000 for married couples -- from their qualified retirement accounts and exempt these funds from being considered in their RMD calculation from age 70-1/2 onward.
There are plenty of considerations that are best addressed on an individual case basis. Your situation is absolutely subject to further discussion before making any decisions about employing this or another strategy. Nonetheles this is certainly one avenue to consider in your plan if you do not need the RMDs.
The quick answer is yes, pay off the mortgage and any other debts you may currently have! Be debt free! You'll still have plenty to work with and invest above and beyond the $180k (plus any other debt you might need to pay off).
However, if you're looking for a "good" reason NOT to pay off the mortgage, any financial advisor could probably give you at least one or two options that would make it appear more attractive than paying off the mortgage.
This is because you can seek investment options that provide the potential to earn a better interest rate on your money than what you'll pay on the mortgage.
However, before you decide to go down this road, be sure you're working with someone who genuinely has YOUR best interest in mind. A big part of determining that this makes sense is looking at it in the context of your overall financial situation (as well as your financial past and future anticipated financial situation). For example, the following are just a few questions that will help inform your decision to forgo paying off the mortgage and instead seek returns from an investment that outperform the mortgage:
How old are you and your spouse?
What is your annual income?
What is your annual budget?
How much of your budget is a necessity vs a luxury?
What other types of investments and/or accounts do you already have setup?
The list goes on, as a solid client interview to help assess the right decision in this situation would most likely include additional initial questions as well as more than a few follow-up questions. Probably a good hour long discussion, if not a couple of meetings before both you, your spouse, and your advisor could truly feel certain that you're making the right decision.
I'm sure there's more than a few advisors (including myself) who would be more than happy to arrange for helping you reach the right decision!