Keep reading to learn more about how lifetime income annuities can benefit both you, the retiree, and your beneficiaries.
get the answers:
What is Lifetime Income Annuity?
A lifetime income annuity can provide you with great benefits after retirement. Retirement is changing in America, pensions are rare and people are living longer. This, on top of combination with market volatility, and the questions surrounding social security benefits. Hence, people are feeling quite anxious and stressed about saving for retirement. You can give yourself a regular cash flow after retirement, however, using this product.
A lifetime income annuity is a contract with an insurance company that allows you to take a piece of your retirement savings and transform it into a lifetime of predetermined regular payments. First, you place funds into the annuity, then an insurance company has a contract with you. At this point, the fixed income annuity, or FIA, converts the value into set payments that you receive over a certain period of time. You can usually set payments to begin once you reach 60 years old, but if you delay your withdrawals the income payments may be larger.
This can help protect you against the risk of outliving your retirement savings, guaranteeing you’ll receive monthly payments no matter how long you live. The monthly amount is guaranteed* and will continue to be paid for the rest of your life. The payments associated with a lifetime annuity payout eliminates any risk of retirees outliving their retirement funds.
What is a
Lifetime Income Annuity Payout?
With FIAs, you collect a series of fixed payments. This happens over a set period of time. Some FIAs offer extra benefits, for instance, you could see payment totals increase if you have an income rider. This helps to keep up with inflation and other retirement cost increases.
Income riders do, however, have some restrictions. For example, taking money before you reach 59 1/2 years old can result in an additional 10% tax on your money.
It’s important to understand not only the benefits but the costs as well. This is why, when you work with Relayer Benefits Group, we’ll gladly meet with you in order to answer all of your questions. Choosing all the right options is the key to your future retirement.
Usually, the accrual period is between 5 and 10 years. If you follow the terms of the contract, no surrender charges are applied, and your annuity contract’s interest credit is protected. But it’s possible for you to choose a longer period, and this could potentially increase your interest rate. Here at relayer Benefits Group, we can help you review all your options. You can join us for our seminars or client meetings. We’ll help you to understand all the details so you can make an informed choice.
How Much Will I Receive?
You can control how much money you receive in retirement with an FIA. During the accumulation stage, your money will grow, and once you’ve passed the waiting period you can begin to receive payments. your contract goes over the details of the payment schedule. You should work with a qualified insurance advisor, in order to see if the benefits of a lifetime income annuity are right for you.
When Do I Get My Income?
There are two main choices for the time in which you receive your annuity payments; annuitization payments and income withdrawals. If you choose to receive annuitization payments, you’ll receive a payment annually. Annuitization payments are also partially tax-free. Some of the income may be refunded for when you paid for the annuity, and the other part may be taxable because of the interest that you’ve earned. If you choose income withdrawals, on the other hand, withdrawals under the annuity are fully taxable until the interest you’ve earned is taxed, and then you withdraw what you paid for the annuity tax-free. It’s always a good idea to speak with your tax advisor before making this choice.
Protection for More than Just Life
If you pass away before you begin to receive your scheduled annuity benefits, your beneficiary will receive a death benefit. And in some cases, even if you pass away after you’ve begun to receive payments from your annuity, there’s a possibility that they’ll 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.
When You Need it Most
The benefit of choice is one of the key reasons retirees choose a lifetime income annuity. You aren’t at risk if the market dips, the insurance company is. Furthermore, FIAs offer ways to ensure your future. Your beneficiary or beneficiaries can even collect your annuity assets without going through probate. Reach out to us today and see if a lifetime income annuity is your best option in planning for your retirement.
*Backed by the claims-paying ability of the carrier.