What is Guaranteed Income for Life?
Guaranteed income for life is a retirement investment solution called an annuity that provides a payment either monthly, quarterly, every six months, or annually for the rest of your life.
How does it Work?
When planning for retirement you can convert part of your retirement savings into an annuity which will provide a stream of guaranteed income payments for as long as you live upon retirement. The annuity can be purchased with a single payment or “premium” or through premium payments over time.
How is My Income Guaranteed?
The annuity, or guaranteed income product, is issued by a reputable life insurance company that guarantees your income for life. Hazard & Siegel only works with companies that have the highest ratings by rating agencies such as Standard & Poor’s, Fitch, A.M. Best and Moody’s Investor Service.
What is the advantage of Guaranteed Income for Retirement?
When you purchase a guaranteed income product like an annuity, you are protecting yourself from the risk of running out of income by outliving your savings because you are guaranteed a payment every month for as long as you live.
The other advantage is that an annuity is not influenced by stock market performance. So it doesn’t matter if the stock market drops, your income remains the same because your annuity locks in and guarantees the amount of your income.
How does an annuity compare to the stocks I own?
An annuity that guarantees income does not provide a “rate of return” like a stock or interest-bearing account because it provides guaranteed income for the rest of your life. That means the income you receive from the annuity is guaranteed for life and is not subject to fluctuations in the stock market. The longer you live the more income you will receive from your annuity.
When can I start receiving my guaranteed income?
That depends on the type of income annuity you buy and when you plan to start taking payments. You can start receiving payments within 12 months with an immediate annuity or you can plan for the future by buying a deferred annuity that is focused on your retirement which you can make regular payments and start getting payments anytime between 2 to 40 years in the future.
What are the restrictions on annuities I should be aware of?
There may be some restrictions based on age, the type of annuity purchased, and the type of funds used to purchase the annuity, but no medical history is required to purchase an annuity. A financial advisor can help you decide which annuity products and retirement plans are best for you.
How do I purchase an annuity and how much should I buy?
Working with a qualified financial planner, you can buy your guaranteed income annuity with savings, investments, inheritances, or other retirement savings. The amount of annuity you purchase depends on the annuity product, your savings, and your retirement planning strategy. Working with a qualified financial planner will help you understand the best approach for your retirement plan.
What happens to the annuity if I die unexpectedly?
Income annuities are a life insurance product and often offer a death benefit. Often there is a “cash refund” option that pays the difference between the full amount of annuity purchased and income payments received to a designated beneficiary.
Can I withdraw money early or take more than my monthly income?
An annuity is a locked contract that guarantees income in the form of regular payments. If you are at least age 59½, you may be able to access future payments, which can be helpful in the event of an emergency, through optional features.
Working with a Financial Expert
A guaranteed income annuity is an excellent way to make sure you don’t outlive your retirement savings and should be considered as part of your overall retirement planning. A Hazard & Siegel financial professional has the experience and retirement products to help you plan for a comfortable retirement, in addition to helping with other financial considerations such as educational funding, life insurance, wealth transfer, or business retirement plans. Contact us today to get started on the road to financial independence.
If you need the insight of a financial advisor, consider working with a Hazard & Siegel Independent Financial Professional. An Independent advisor will make the best decisions for you because they are not affiliated with an investment company, mutual fund, or specific investment product. Hazard & Siegel Independent Financial Professionals are part of a network of registered investment advisors, insurance professionals, and investment brokers. Our independent financial professionals are available to advise you on planning for your future including paying for college, wealth management, retirement planning, paying for long-term care, estate planning, insurance needs, and wealth transfer.
Hazard & Siegel offer clients the flexibility and choice of both fee-based and commission-based platforms, dependent upon what works best for your plan, and what you are most comfortable with. Both approaches have their advantages, but ultimately you as the client get to decide which fee structure or combination of fee structures work best for you.
Talk to Hazard & Siegel when you need a comprehensive lifetime financial solution.
Contact us today at 315-414-0722, or visit our personal investing page.