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Lifetime Income

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There are plenty of ways to create retirement income, but only a few of them come with guarantees. Retirement Income Planning is NOT the same as Retirement Income guessing! Most of us want our retirement years to be our Golden Years – the Happily EVER after YEARS! This can be achieved with a predictable guaranteed monthly income which is sufficient to sustain our retirement plan budget. However without an income to count on and with constant market turmoil your retirement years could be stressful and more like a living nightmare then living happily ever after. Most Monte Carlo simulations have a disclaimer stating that the information is deemed to be 80% correct up to age 90 – what happens after age 90 and what about the other 20%?

Guaranteed lifetime income riders are features offered on Deferred Equity Indexed annuity contracts and they can be quite appealing because they do just that – they guarantee lifetime income. They are called ‘riders’ because they are contractual guarantees attached to an annuity contract offered by a Life Insurance carrier. Life insurance companies traditionally insure us against dying to soon – we are all familiar with life insurance. However they also insure us against LIVING too LONG! This is a big concern in Retirement Planning – running out of money during your lifetime in retirement. Pensions that provide a lifetime income are far and few between these days except in the Public sector. Social Security does provide a lifetime income but is usually not enough income to live on. Many Baby Boomers are retiring with impressive 401 (k) Balances – however will this money last the rest of their lifetime and provide the lifestyle you are accustom to? You can take all the guess work out of this with an annuity that offers a Lifetime Income Benefit Rider. You and your spouse (if applicable) can enjoy a stream of income that you can never outlive – GUARANTEED! 

These annuities work great as a Retirement Plan distribution strategy but also work well as an accumulation vehicle. Before you begin taking your lifetime income most products offer indexed returns to some outside Equity Index in order to grow your actual account balance, please review Equity Indexed Annuities for more information. However there is  normally a guaranteed rate of return that is credited to the ‘Lifetime Income Benefit’ account – no matter what the equity markets do. In addition you can not lose money in a fixed annuity – your principal and some minimum amount of interest are guaranteed. So even if the actual account value does not increase it can not decrease based on a market correction and no matter what the markets do your Lifetime Income Benefit account value is credited with positive earnings based on the declared rate – which is guaranteed for the initial period you select.

This strategy can take a lot of stress off people in pre-retirement and in retirement so they can sleep easy at night. It can also take stress off assets that are invested in the equity markets to grow, while at the same time taking distributions for income. This way if the markets have a correction, you do not have to panic because your monthly living expenses are guaranteed and you can just wait for the market to correct again. In addition, lifetime income payments from retirement plan accounts qualify as Required Minimum Distributions (RMD’s) once you reach 70 1/2 years old.

Don’t do Retirement Income Guessing when you can GUARANTEE your retirement income and live your ‘Happily ever After’. Call our office today and get the information you need to make the right decisions for your retirement income planning!