Is your retirement income keeping up with inflation?
Are you worried about running out of money?
Annuities can offer a guaranteed income for life. This means that you could receive a fixed stream of income payments for as long as you live, no matter how long you live. This is important for anyone who wants to ensure a steady income in retirement. There are various annuities that offer different income options, so be sure to speak with one of our financial advisors to find the right product for you. Several annuities also offer inflation-adjusted income, which can help ensure that your payments keep up with the cost of living!
What are annuities?
An annuity is a financial product that pays out a fixed stream of income payments to the holder. There are many annuities available, but all offer some form of regular payment for a number of years or for life. They can be part of a retirement plan and and offer a variety of benefits:
1. Asset Protection
An annuity can offer protection from creditors if you are sued or declare bankruptcy. This is because annuities are considered life insurance products, and as such, the money in your annuity is not typically accessible to creditors. This can provide peace of mind knowing that your hard-earned retirement savings are safe from creditors. Asset protection is an important consideration for anyone with significant assets, and annuities are an excellent way to protect your savings.
2. Death Benefit for Heirs or Beneficiaries
Another important benefit of annuities is that they typically come with a death benefit. This means that if you die before the annuity pays out, your beneficiaries will receive the death benefit. This is an essential consideration for anyone with loved ones depending on them financially. The death benefit can also help pay for final expenses or estate taxes. According to a recent study, nearly half of Americans say that they would not have enough money to cover their funeral expenses if they died today. An annuity with a death benefit can help ensure that your loved ones are taken care of financially if you die unexpectedly.
3. Tax-Deferred Growth
Annuities offer tax-deferred growth on your investment. This means that you will not pay taxes on any earnings or growth in the value of your annuity until you begin to make withdrawals. This can lead to significant tax savings over time, and it can help your money grow faster than it would in a taxable account. Many annuities also offer some form of guaranteed cash value growth, which can provide peace of mind knowing that your investment is growing even if the market goes down. Also, if you are in a high tax bracket, the tax-deferred growth can be especially beneficial. This is because you will not have to pay taxes on the growth until you withdraw the money, and by then, you may be in a lower tax bracket.
Annuities is a flexible retirement planning tool. For example, you can choose how much income you want to receive and for how long. You can also choose to receive your payments monthly, quarterly, or annually. Many annuities also offer the option to take a lump-sum payout if you need access to your money for an unexpected expense. If you need to make a withdrawal from your annuity before age 59 ½, you may be able to do so without paying a penalty. However, it is important to note that withdrawals will reduce the death benefit and income payments that your beneficiaries will receive.
5. Automated Portfolio Strategies
Some annuities offer automated portfolio strategies, which can help you manage your investment without having to do it yourself. With an automated portfolio strategy, your annuity will automatically rebalance your investment mix and make changes as needed to help you reach your goals. This can be a helpful feature for anyone who wants to invest in an annuity but does not want to actively manage their investment. Also, some annuities offer asset allocation models, which can guide how to allocate your assets across different asset classes.
6. Steady Income and The Potential for Higher Returns
Annuities can offer steady returns compared to other types of investments. This is because annuities are often structured as insurance products, thus taking advantage of the law of large numbers. The law of large numbers is a statistical principle that states that the more data you have, the more accurate your predictions will be. This principle can work in favor of annuity investors because the insurance company that issues the annuity is pooling the money from many different investors. This gives the insurer a large pool of data to work with, which can lead to more accurate predictions and higher returns for investors.
The above are few of the potential advantages of annuities. Annuities are complex products not right for everyone. If you are interested in learning more about this retirement planning tool, contact us for more information, or to set up a no-cost, no-obligation financial review.
We are independent insurance brokers,
which means we have access to all available carriers, such as:
...and many others!