Let a knowledgeable and experienced representative from Advanced Capital Management, Inc. show you a foolproof way that you will never outlive your money, even if you live to be 100 years or older. Investing in a fixed index annuity or hybrid annuity with a lifetime income annuity rider can provide you with a steady stream of income for the rest of your life.
Comparison to other income-producing investments
It is true that you can create a stream of income by building a portfolio of bonds, CDs and dividend-paying stocks, but all of those investments have risks.
- Bond values are tied to interest rates and can lose value when interest rates rise.
- CDs do provide safety from loss of principal, but you pay for that safety in the form of very low interest rates.
- Dividend paying stocks are attractive when the market goes up, but when it goes down, you can lose money on your investment.
How does it work?
If you have accumulated money in an IRA, 401-K or other investment, you can use some or all of that money to buy an annuity with a lifetime income rider. You can either purchase an immediate annuity or a deferred annuity. With the former, you begin receiving regular payments within a short period of time of purchase. With a deferred annuity, the money you invest is allowed to earn interest and grow over a specified time, before you begin to receive regular payments from the insurance company.
When you buy an annuity in order to generate income during your retirement years, you want to find the highest income annuity possible without incurring undo risk. For most investors, that means purchasing a fixed index annuity or hybrid annuity. Variable annuities, in general, carry a higher risk because their performance is based on the underlying investment. If the underlying investment does not perform well, your variable annuity return may not meet your expectations.
A lifetime income annuity rider pays you a certain amount of money under the payment schedule specified in the annuity. It usually is monthly, but it could also be quarterly, annually, or some other option. Funds that you receive come from the amount of money you invested plus any interest your investment earns.
How you receive your payments depends on the option you choose. There are three possible options for receiving regular payments for the remainder of your life.
- A fixed income option will pay you the same amount each month, quarter or year.
- A variable income option will pay you an amount that can be higher or lower than the previous payment depending on the performance of the underlying investment.
- A combination income option has a guaranteed payment amount that can increase based on the performance of the underlying investment.
Setting up your account
Annuities can be complicated and most lay people do not fully understand how they work. It is best to sit down with an expert to discuss your options. How you receive payments is a decision that requires both knowledge of your options and considered thought.
- Lifetime payments - You receive a specific amount of money up until your death and then no further payments are made.
- Period certain payments - You receive payments up until your death and your beneficiary receives payments for a specified period after your death.
- Joint and survivor - A husband and wife can be co-annuitants and receive payments during their lifetimes. When one spouse dies, the other will continue to be paid.
Benefits of a lifetime income annuity rider
Annuities come in different shapes and sizes. All of them are insurance products and they can vary depending on which insurance company offers them. A lifetime income annuity rider is a feature that many people who invest in annuities find to be very desirable. It will cost you a little extra to add this valuable feature when you purchase an annuity, but, for most, the benefits outweigh the additional cost.
- You will always have more than Social Security as a source of income.
- If you live beyond your life expectancy, you will still get regular payments.
- If you die early, your beneficiary will receive the amount of your original investment that has not been used to make monthly or periodic payments.
Advanced Capital Management, Inc. can show you how to get better returns on your retirement dollars and provide you with the income you need. Find out more about how a lifetime income annuity rider works. It costs you nothing to find out if a Fixed Index Annuity is the right option for you. Just click on the orange “Get Annuity Quote” button to the right and see how you can generate the most income, safely, for your retirement.