Potential Benefits
What Are the Benefits of an Annuity?
We’re here to help you find out which annuity benefits may apply to you.
Retirees: What Are the Benefits of an Annuity?
Certain types of annuities may have benefits especially suited for retirees and pre-retirees. For example, a fixed index annuity (FIA) offers a guarantee of lifetime income*. Specifically, this is backed by the claims-paying ability of the issuing insurance company. Basically, an FIA is a contract or agreement that your money is kept in for a certain number of years. During this time, you cannot withdraw money from the annuity. However, after a certain time period, the insurance company will be able to send you payments. Indeed, the amount of the income payment may increase if you wait longer to withdraw money. Also, the FIA has the very useful benefit of protecting* your principal.
Your Life, Your
Income
What are the benefits of an annuity when it comes to paying the bills? With their fixed payments, FIAs provide one way for retirees to receive a consistent income. Additionally, when costs go up, you may want to have an FIA that allows for an increase in income payments as well. Some options, such as an income rider, may allow for something like this. However, different benefits also affect your overall annuity picture and certain conditions may apply. Therefore, be sure to learn more about your options before making a final decision. No matter your choice, it’s good to know your options for how you might access your income in retirement.
Your withdrawal of your retirement savings may also impact your taxes. For instance, one issue you may face is trying to take money out of your traditional retirement accounts too early. Yet, there may be ways to reduce the impact of this. Some situations may allow you to utilize an FIA and discover the answer to the question, “what are the benefits of an annuity?”
Access and Time
In retirement, being able to access your money may be an important part of your plan. Part of the process of an FIA is a specific period of time during which you leave your money in the annuity. Then, you have a period where you may access a certain percentage of your money each year. This combination affords the insurance company an opportunity to potentially grow your money, while still protecting your principal. Finally, when your end of life arrives, an FIA may also protect your beneficiaries with a death benefit.
Flexibility and Choice
What are the benefits of an annuity in terms of flexibility, and the choices available to you? Specifically, when it comes to fixed index annuities (FIAs), here are some of the primary benefits:
1
Range of Time
In retirement, being able to access your money may be an important part of your plan. Part of the process of an FIA is a specific period of time during which you leave your money in the annuity. Then, you have a period where you may access a certain percentage of your money each year. This combination affords the insurance company an opportunity to potentially grow your money, while still protecting your principal. Finally, when your end of life arrives, an FIA may also protect your beneficiaries with a death benefit.
2
Total Value
When it comes to the total money accumulation, you may have options with an FIA. For example, some FIA agreements allow for an increase in potential index interest the longer you wait for income payments. Other FIAs offer bonuses on your initial 12-month or 18-month deposits.
3
Income Options
There's a lot of flexibility in terms of the income provided by an FIA. You can decide to be paid each year, or monthly. In addition, you can select certain living benefits that may change your income as well. We recommend you get informed so you can make the decisions that are right for your retirement.
Disclosure & Disclaimer
We are not affiliated with any educational or government agency. This material is for informational purposes only and is not intended to be a solicitation for or offering of any product or investment. We do not provide investment, tax, or legal advice. Always consult with your own qualified advisors regarding your individual situation. Insurance and annuity products are not suitable for everyone. They involve fees and charges, including potential surrender penalties. Optional benefits and riders may involve additional annual costs. Life insurance requires medical and often financial underwriting to qualify. Loans and withdrawals from life insurance policies reduce policy death benefits and cash values, and may cause the policy to lapse or require additional premiums to remain in-force. Annuity withdrawals are subject to ordinary income taxes, and may incur a 10% IRS penalty if taken before age 59½. Product features and availability vary by state. Fixed indexed life insurance and annuities are not direct investments in the stock market or any index. The interest credited may be linked to the performance of an external index, but the contract does not directly participate in any index or equity/fixed interest investments, nor are you buying shares in an index. Crediting is subject to limits set by the issuing company, such as caps, spreads, and participation rates. Long-term care riders on insurance or annuity products are not a replacement for traditional long-term care insurance. Guarantees are backed solely by the financial strength and claims-paying ability of the issuing company. The offer and sale of insurance products may only occur in states where the agent is licensed and the product is approved for sale. Investment advice relating to securities may only be provided by a properly licensed individual through a licensed affiliate entity, unless otherwise exempt. Comments about past performance should not be construed as a guarantee or assurance of future results. This website may include concepts with legal, accounting, and tax implications. We do not provide specific legal or tax advice, nor do we promote, market, or recommend any tax plan or arrangement. Consult a qualified professional for guidance. No representation is made as to the accuracy or completeness of the information provided here or through any external links. Visiting this website does not create an agent-client relationship.
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