Annuities:

Protection Benefits

Looking for a way to guarantee* an income for life in retirement? An annuity might be the answer. 

Income For Life

Looking for retirement income for life? You may want to understand how annuities work. Of course, not all annuities are the same. Some, such as variable annuities, are not guaranteed* by the insurance company. Other types, such as a fixed index annuity (FIA), may protect your principal. Further, with an FIA, your money is guaranteed by the claims-paying ability of the insurance company. So, how does an FIA provide potential income for life?

First, you enter into an annuity contract with an insurance company. Then, you put money into that policy.

After some time, you can then take set payments out in the form of income. Indeed, some retirees use these payments as retirement income for life. Of course, there may be rules about how much money you can take. Also, you will have guidelines on when you can take your money out. However, the protection benefit of keeping your principal while still receiving income stays in place. As long as you understand and follow the information in your contract, you may be able to use an FIA as income for life.

Income Riders: What You Need To Know

As you may know, FIAs can give you payments or income for life. However, did you know you may also be able to decide how you receive this? For example, you might get this payment over time as the same fixed amount. Or, you may choose to have an income rider. Income riders may allow your income payment to increase over time. Some retirees choose this option to help keep up with inflation. Or, they may anticipate an increase in costs as they age. For instance, healthcare, costs of living, or lifestyle changes may impact your income needs.

Here are some other things to note about income riders.

First, consider your rate of return. If you select an income rider, you may see a lower rate. Or, you may see different details about participation or cap rates. However, if having income for life with potential for increase may be important to you. Therefore, be sure to understand all your options. At Lifelong Financial Solutions, we can help you go over all these details. We will provide you with information you need to make a decision that is right for you.

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Flexible Income for Life

Once you reach retirement, your priorities may shift. One of these priority shifts is the willingness to risk all your money. For most retirees, it is a time to ask “what is a reasonable rate of return?” and “how do I achieve it?” One strategy is to determine the amount of money you will continue to risk versus the amount you now want to keep safe. In addition, consider the level of risk as well. Some options may provide more security of principal than others. Once you have that decision made, you can look for a reasonable rate of return.**

Timeline For Income For Life

With an FIA, your income is usually not accessible immediately. Instead, you allow time for the insurance company to potentially grow your money. Then, after the specified time period, you can begin income for life payments. With some FIAs, you may see an increase in potential index interest the longer you wait for payments.

Your Income, Your Choice

Want to have a bigger income payment later or a little less sooner? Looking to keep your money secure but don’t need income payments for a while? FIAs and other annuities may provide options for how and when you get your retirement income. Be sure to speak with us here at Lifelong Financial Solutions. Or, attend one of our educational seminars to learn more.

Tax Deferment & Income For Life

Some annuities may provide a way to defer your tax. When you tax income payments, you are typically subject to taxes on that money. However, tax rules differ with an annuity versus other retirement vehicles. Be sure to seek proper tax advice for your situation. In general, with an FIA, potential index interest is applied without an immediate tax event.

For Your Legacy

Want to leave money behind for those you love?

An FIA may offer options for this as well. For example, you may be able to provide monthly income payments to your spouse upon your passing. Or, you may opt to have a lump sum payout to family. Again, be sure to reach out to learn more. 

We’re here to help.

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