Plan for the Future
Protection Benefits
A Guaranteed Lifetime Income — For as Long as You Live*
What Is a
What Is a Guaranteed Lifetime Income Annuity?*
Retirement has changed in America. People are living longer, pensions are rare, and market volatility has many people feeling anxious about saving for retirement. However, there are plans you can create to give yourself a regular cash flow in retirement — using a guaranteed* lifetime income annuity.
A guaranteed* lifetime income annuity is a contract with an insurance company that transforms a piece of your retirement savings into a lifetime of predetermined regular payments. Usually, you can set payments to begin once you become 60 years old. However, if you delay your withdrawals, the income payments are often larger. No matter how long you live, you have the peace of mind knowing you will always receive monthly payments — eliminating any risk of outliving your retirement funds.
What Is a Guaranteed Lifetime Income Annuity Payout?*
With fixed index annuities (FIAs), you collect a series of fixed payments over a set amount of time. Some fixed index annuities (FIAs) offer extra benefits. For example, if you have an income rider, you could see payment totals increase to help you keep up with inflation and other retirement cost increases.
To be clear, income riders do have some restrictions. For example, taking money before you are 59½ years old can result in an additional 10% federal tax on your money.
It is important that you understand not only all the benefits but the costs as well.
Your Choices
Usually, the accrual period is set between 5-10 years. If you follow the terms of the contract, no surrender charges are applied and your annuity contract’s interest credit is also protected. However, it is possible to choose a longer period, which could potentially increase your interest rate. Our team at Cornerstone Wealth & Tax Advisory Group is available to help you review all your options. You can join us for our seminars and client meetings. We will help you understand all the details so that you can make an informed choice.
There are two main choices for the timeline in which you receive your annuity payments. The first is annuitization payments — you will receive your income annually, and annuitization payments can be partially tax-free. The second option is income withdrawals, meaning that withdrawals under the annuity are fully taxable until the interest you have earned is taxed, then you withdraw what you paid for the annuity tax-free. It is always a good idea to speak with your tax advisor before making your choice.
You can control how much money you receive in retirement with a fixed index annuity. During the accumulation stage, your money will grow. Once you have passed the waiting period you can begin to receive payments. Your contract will go over the details of the payment schedule. You should work with a qualified insurance advisor to see if the benefits of a guaranteed* lifetime income annuity are right for you.
Money for When You Need It Most
The benefit of choice is one of the top reasons retirees choose a guaranteed* lifetime income annuity. You aren’t taking a risk if the market dips — the insurance company is. If you pass away before you begin to receive your scheduled annuity benefits, your beneficiary will receive a death benefit. In some cases, even if you pass away after you have started to receive payments, there is still a possibility that they will receive a death benefit. Your beneficiary can receive this money as one lump sum, or in payments — without going through probate. Reach out to our team today and see if a guaranteed* lifetime income annuity is your best option in planning for your retirement.