With demographic trends
pushing the length of retirement to 25 or 30 years and beyond, it's important
to create a retirement investment strategy that generates an income stream that
you won't outlive. If you're looking for an investment vehicle that promises a
guaranteed, lifetime income stream, then you may want to consider annuities.
Simply put, annuities can help ensure that you won't outlive your savings.
Annuities Defined
Annuities are insurance contracts that
promise future payments. They’re long-term, tax-deferred investment vehicles
designed for retirement purposes. There
are two distinct phases to annuity investing: the "accumulation
phase" occurs when you are contributing, while the "annuitization or
distribution phase" occurs when you withdraw money.
While annuities may be attractive because they usually impose no contribution
limits and offer tax deferral, they also have other appealing features as well,
such as their numerous "payout" options in the distribution stage.
For instance, during retirement you can receive your money from an annuity in a
single lump sum or as a series of regular payments over your life or some other
predetermined number of years. Some retired clients find it easier and less
stressful to manage their household expenses through a regular income stream,
just as they did while working.
But getting a regular income stream doesn't necessarily limit your options.
Today's annuities offer the flexibility, access and control over your money
that often wasn't available in the past. Product innovations have resulted in
optional benefits that provide downside guarantees¹, the ability to capture the
market's upside, inflation protection and cost-of-living increase features, all
of which may help investors plan for a long retirement.
In short, annuity payouts through a regular income stream may be an important
part of your retirement portfolio. If you own an annuity now, you might want to
consider using it to potentially generate income. For more detailed information
about the role that annuities might play in your financial future, contact a
qualified financial professional.
¹Riders are additional guarantee options that are available to an annuity or
life insurance contract holder. While
some riders are part of an existing contract, many others may carry additional
fees, charges and restrictions, and the policyholder should review their
contract carefully before purchasing.
Variable and fixed annuities are long-term, tax-deferred
investment vehicles designed for retirement purposes; but the variable annuity
contains both an investment and insurance component. Variable annuities are sold only by
prospectus. Guarantees are based on claims paying ability of the issuer. Withdrawals made prior to age 59 ½ are
subject to 10% IRS penalty tax and surrender charges may apply. Gains from tax-deferred investments are
taxable as ordinary income upon withdrawal.
The investment returns and principal value of the available sub-account
portfolios will fluctuate so that the value of an investor’s unit, when
redeemed, may be worth more or less than their original value.
Investors
should consider the investment objectives, risks, charges and expenses of the
variable annuity contract and sub-accounts carefully before investing. The prospectus contains this and other
information about the variable annuity contract and sub-accounts. You can obtain contract and underlying
sub-account prospectuses from your financial representative. Read the prospectuses carefully before
investing.
© Carmen Coleman, President and CEO
Lifetime Financial Group, LLC
30 W. Broad Street, Suite 300
30 W. Broad Street, Suite 300
Rochester, NY 14614
(585)325-2525
