Guaranteed lifetime income when you need it.
Income is at the core of any successful, financially stable retirement. Unfortunately, many retirees aren’t lucky enough to benefit from a guaranteed income source like an employer pension. While most retirees will receive Social Security benefits, those payments may not be enough to fund a full retirement.
The good news is there are other options available to generate predictable lifetime retirement income. One such option is an income annuity, which is an innovative financial tool offered by life insurance companies.
An income annuity allows you to contribute a lump sum of money into a policy and then convert that lump sum into an income stream that is guaranteed for the rest of your life. Income annuities are similar to immediate annuities. The primary difference is that an income annuity may offer more flexibility than found in an immediate.
Below are a few of the most attractive benefits of an income annuity. If you’re looking to fund your retirement with guaranteed lifetime income, an income annuity could be the right strategy for you.
Perhaps the most attractive benefit of an income annuity is that it provides income that is guaranteed for life, no matter how long you live. The income is generated through a process known as annuitization.
When you annuitize a contract, your contributions are converted into income that is guaranteed for a specific period of time, usually your lifetime. The income amount is based on your life expectancy, the premium amount, interest rates, and more.
Annuitized income can be a valuable benefit in retirement because it provides you with cash flow certainty. You know exactly how much income you’ll receive every month and you can be confident that the income will continue as long as you live.
Immediate annuities and income annuities are similar in that they both use annuitization to convert your funds into guaranteed lifetime income. However, they differ in the way those income payments are scheduled.
As the name suggests, annuitization payments in an immediate annuity start as soon as the policy is opened. In an income annuity, you have the option of scheduling the income at some point in the future. This gives you the opportunity to grow your assets before you need cash flow.
Another attractive feature in an income annuity is the ability to increase your payments over time. Most immediate annuities offer level income streams. However, in an income annuity you may be able to increase your income every year. That can help you keep up with inflation, rising medical costs, or other increasing expenses.
Some income annuities even allow you to increase your benefit based on market performance. These annuities invest your contributions into an allocation that is consistent with your goals and risk tolerance. If the investments perform well, your income may increase. If they perform poorly, the benefit could stay flat or even go down.
An income annuity could be an innovative way to fund your retirement in a way that is guaranteed and predictable. Contact us at America’s Annuity today to learn more. We welcome the opportunity to help you fund the retirement you’ve always imagined.