Protection Benefits:

Guaranteed Annual Income For Life

What is A Guaranteed Income Annuity?

A guaranteed lifetime income annuity can present retirees with several excellent benefits. Retirement in America has changed and you need to prepare for the future. Between market volatility and the questions circling social security many people are feeling uneasy and stressed when it comes to planning their future retirement. However, a guaranteed lifetime income annuity is a retirement plan that can give you a steady flow of cash in retirement.

A guaranteed lifetime income annuity is an agreement between yourself and the insurance company. The contract enables you to convert a percentage of your retirement savings into a lifetime of planned regular payments. To start, you allocate funds into the annuity. It’s then that an insurance company has a contract with you. At this point, the fixed income annuity (FIA) transforms the value into set payments that occur over some time. Usually, you can arrange installments to start once you are 60 years old. However, if you delay your withdrawals, the income payments are often more substantial.

A guaranteed lifetime income annuity can assist in protecting you from the risk of outliving your retirement savings. That means, no matter how long you live you have peace of mind knowing you will always collect monthly payments. The monthly amount is guaranteed income and will continue to be paid until you die. The payments affiliated with a guaranteed lifetime annuity payout reduces any risk for retirees of outliving their retirement funds.

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Protection Benefits:
The Flexibility To Choose

There are a few crucial advantages to a fixed index annuity. One of those is the flexibility of choice regarding the range of guarantees and optional protection benefits available to you. The benefits transfer the risk to the insurance company that issued the FIA. This is a form of protection for your retirement income, assets, and your beneficiaries. Protected lifetime income benefits are explained further below:

Usually, a fixed index annuity (FIA) growth phase is between 5 and 10 years. As long as you follow the rules of your contract, you will lose any money you place in your annuity to surrender charges. During the accumulation phase, your contract’s interest credit is locked in and safe as well. You can also choose a longer period for the growth phase, which could increase your profits.
By using a fixed index annuity you can control your retirement income, based on the annuity you choose and how much you put in. During the accumulation stage, your money will grow. Once the waiting period is over, you can begin to receive income payments without any extra fees. You can receive your contract value in a flow of income for the rest of your life and possibly longer. The amount you receive is dependant on the worth of your annuity contract on the date you begin withdrawing funds and the payout schedule chosen.
Retirees usually have two main options for receiving income payments: annuitization payments or income withdrawals. Both types of payment are taxed differently. For certain annuities that aren’t held in a qualified plan like a 401(k) or an IRA, part of each annuitization payment is a tax-free return of what you bought the annuity for and part is taxable as interest you earned on the annuity. Alternatively, income withdrawals under the same annuity are fully taxable until the earned interest is taxed. Afterward, you can withdraw what you paid for the annuity tax-free. It is always important to be sure you consult with a tax advisor before making your choice.

If you happen to pass away before you start to receive your planned annuity benefits, your beneficiary will receive a death benefit. Also, in some instances, even if you pass away after you have started to collect payments from your annuity, there is still a chance that they will still receive a death benefit. Your beneficiary can receive this money as one lump sum, or in payments.

Even retirees who have no plans to access their income from their annuity can choose a fixed index product.

Financial Strength

When it comes to annuities, guarantees are important. That’s why it is crucial to consider who is backing those guarantees. The guarantees are solely backed by the insurance company that issues the annuity. It’s important to know the stability and financial strength of the insurance company. Some factors to consider include:
Does the company have a good track record of successfully hedging against possible extreme market events?
What is the company’s commitment to stability, as well as long-term performance and reliability?
Independent agencies impressions of a company’s strength and their ability to satisfy current insurance policy and contract obligations.
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Money For When You Need It Most

The advantage of the option is one of the top reasons retirees choose a guaranteed lifetime income annuity. You aren’t taking a risk if the market dips, the insurance company is. Also, fixed income annuities (FIAs) offer approaches to guarantee your future. Your beneficiaries can even receive your annuity assets without going through probate. Reach out to our team today and see if a guaranteed lifetime income annuity is your best option in preparing for your retirement.

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