All of us have monthly bills and obligations, even if you consider yourself “debt free.” For the planner types out there, it’s good to know that you have enough guaranteed income for your life (and your significant other’s) so that you can fully enjoy your retirement years. It’s not about the market, it’s about lifestyle. And that lifestyle has to be funded by guaranteed income streams. Some of the possibly needed income gaps can be filled with annuity transfer of risk strategies like immediate annuities or longevity annuities. Whether you are already retired, or have a target date when you plan on retiring, it’s important to know the specific dollar amounts of your retirement income sources. Some sources of income are: Social Security, Dividend Income, Pension Income, Annuity Income.
If you do not have enough retirement income to cover your lifestyle, below are some annuity strategies that can fill the needed income gaps. Annuities allow you to contractually solve for a guaranteed monthly or annual dollar amount to cover the exact amount needed for life.
Income needs now— Single Premium Immediate Annuities can be set up either single life or joint life to provide an income stream that you can never outlive. You also can combat inflation by attaching a contractual COLA (Cost of Living Adjustment) that increases your income annually by a specific percentage that you choose at the time of application.
Income needs later — Target-date income planning, or income later can be achieved by using longevity
annuities or income riders attached to deferred annuities. COLA riders can be contractually attached if inflation is a concern. Using annuities for income later planning allows you to know the exact dollar amount of lifetime income stream that will start on a specific date in the future. For the detailed planner, this is a great feature.
Split annuity strategy — You can combine both income now and income later strategies to contractually
guaranteed income streams to start immediately and at specific date(s) in the future. You also might be familiar with this approach also known as a bucket strategy, where different tranches of money create income streams at different designated times. Achieving your retirement income goal, and covering those income needs for life, is one of the final hurdles that all of us want to achieve. For most people, utilizing these strategies is the only guaranteed way
to get there.
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