GUARANTEED BASIC INCOME
GUARANTEED BASIC INCOME IN RETIREMENT
With a fixed index annuity (FIA), you can receive a guaranteed basic income, for life. An annuity is a contract with an insurance company. You put money into an FIA or fixed annuity, and your money eventually converts into set payments. You can take these payments after a surrender period. Your income is therefore promised by the insurance company. Typically, people begin withdrawing after age 60, but this may vary. Delaying your payments might mean your income amount is larger. Another big benefit: your principal balance has protection from market loss.
WHAT IS AN ANNUITY PAY OUT?
With a fixed annuity as well as an FIA, you get a series of set payments. This happens over a particular interval. Some FIAs also offer other benefits, including income riders and death benefits. For instance, an income rider allows you to increase your income amount from the annuity as costs rise. For many retirees, they use this benefit to stay ahead of inflation and other increasing living expenses.
Of course, there are limitations when it comes to income riders. First, not all policies will offer them. Secondly, some situations may not warrant the use of this income rider benefit. It is important to understand all costs that come along with these benefits, too. Dan Orfin and his team are more than happy to review your options with you. We are here to answer questions and help you find a guaranteed basic income that’s right for you.
Taking income from an annuity may also impact your taxes. For instance, taking money from retirement accounts too early could create a 10% federal tax. For the most part, fixed annuities and FIAs are tax-deferred until you withdraw money. However, contact us to learn specifics about your accounts and situation.
MONEY WHEN YOU NEED IT
Annuity contracts have several benefits. One of the biggest is that the insurance company protects your money from stock market risk. If the market drops, they take the risk, not you. Also, there are potential benefits for loved ones left behind, as well. Typically, annuity death benefits are not subject to probate.