Take out 40.4% Federal (highest tax bracket plus insipid obamacare tax) Take out your state income tax (AR=7%)
Final after tax lump sum for ME= ~$550,000,000 in the bank.
Id take $55,000,000.00 off the top and tithe.
Then invest the 495,000,000.00 in one of two ways:
1) 500 mm in double tax exempt GO munis so I never have to pay taxes again.
OR
2) divide it up in 4 100mm blocks.
1) 100mm in tax free AR munis Aa2 school bonds with state aid. 4-5% coupon. I don't care if I pay premium.
2) 100mm in taxable munis prefereds and corporate bonds for higher cashflow. Nothing below 5% coupon.
3) 100mm in Mortgage Backed securities with GNMA/FNMA obligations for monthly asset backed income. Typically 3-handle coupon but usually has a government backing.
4) 95mm in equities in stocks with at least a 3% dividend yield and that George Soros or China cant mess with: JNJ, AAPL, T, VZ, D, SO, DUK, BUD, KO, PEP, UNP, Visa, PG, DWDP, BA, CAT, DE, etc.
So I have a tax free debt income, a taxable debt income, a taxable asset backed income, and a growth income in the market.
It would take a couple of months to buy that many securities and structure them in a laddered portfolio, but I would continue to work for a while and pay off debts with my income generated.
Of course wife and I would be gifting the maximum annual exclusion of $11,000,000.00 to each family member.
The goal would be an average of 4% coupon: 4% on 500mm = $20 million a year tax free income. We can't spend that. We would be gifting ALOT.
First donations would go to Church(es), NRA, GOA, FreeRepublic, etc.
We'd probably retire in 2020 and give 18 mm away every year and live on 2mm tax free income. We just couldn't spend that much money.
What?
THAT’S worth copying and saving!
Bookmarking your advice for when I get 3 numbers correct and win $10 and need a sound financial plan. Thanks.