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Immediate annuity interest rates http://www.retiresharp.com/immediate-annuity/ . What are the best immediate annuity interest rates
throughout the nation? Call 1-800-566-1002 to obtain the best immediate annuity education
and learn the best rates that correlate to your specific goals...
Immediate Annuities- Income for Retirement You Can Never Outlive!
Annuities can be a great tool to leverage when you are either gearing up or are currently
in retirement. Whenever you think of financial products in general, I want you to think of
individual tools in a tool belt. Each tool serves its own purpose and is most important
depending upon your specific situation. That is exactly how annuities work as well.
The main purpose to utilize an annuity is for maximized income. Your situation may be
to turn on income from your accounts within 20 years; it may be to turn on income instantly,
or even produce and income stream to leverage for inheritance maximization.
The number one flaw that many individuals make when determining whether or not an annuity
is right for them is by simply not sticking to their own goals. You have to make that
judgment on what do you want out of retirement? Is it to have peace of mind that you can never
outlive income? or Would you rather take a gamble on the stock market roller coaster
that produces a maybe retirement??? Be mindful that not all annuities are the
same and annuities that currently being offer came a long way since inception.
The first annuity I want to touch up briefly on is called an IMMEDIATE ANNUITY. When dealing
with this type I want you to automatically think “pension” annuity.
Just like a pension, when you decide to turn on your income payments you are competing
against the mortality table clock (life expectancy) and are guaranteed an income stream that you
can never outlive. In an ideal situation, you are coming to an insurance company with
a sum of money (can be cash, can be previous retirement accounts) and they are guaranteeing
you a payment stream regardless of how long you live.
The amount that is guaranteed for you to not outlive will be larger if you are older and
smaller if you are younger. If you have both a male and female, the same age, purchasing
an immediate annuity the male will receive a larger dollar amount (because it is proven
through mortality tables that females live longer than males, so the company is determining
that is riskier to give the same payout to both, resulting in different amounts).
The downside to this type of annuity is that you are surrendering your dollars towards
the insurance company and they are now holding the income terms. If you ever needed that
money back because you came into an “oh my gosh” moment, the most that is given
to you is your income payments determined at inception of the contract.
Ex) You are a 70 year old male that purchased a $200,000 immediate annuity, after receiving
$18,000 per year for 2 years you came into an “oh my gosh” moment that you need $50,000
for. Because you decided to purchase an immediate annuity and not another type of annuity, you
lost control of your lump sum amount because that was determined off of the contract at
inception (the terms of that annuity contract). Now what happens when you pass away???
This all depends upon how you decided to take your income payments. The highest amount of
money you can receive from an immediate annuity is taking the life only option. This option
covers the annuitant for his/her life only. If you were to choose this option and die
after 2 months, the company wins. If you were to choose this option and live for a long
time, you win on the deal. In a hypothetical example; you are a male
age 65 and purchase a $100,000 immediate annuity, the company determines that they will give
you $7,000 per year for the rest of your life (7% payments from your original $100,000).
If you pass away after 2 years you received a total of $14,000 and the company won on
this deal because they made $86,000. If you live past 15 years you would have more than
received all of your money back and the company is still contractually obligated to pay you
$7,000, the longer you live the more you win! This option is equivalent to taking a life
only pension option, it will cover your life only, whenever you pass, that income stream
will stop. The second payout option you can choose is
a joint option. This option will produce less income but will cover both you and your spouse’s
lives, whenever the second annuitant passes away, income stops.
The reasoning for the income payments to be smaller is that rather than the company just
taking on the risk of one life, the company is now on the hook for two lives. This option
is equivalent to choosing the joint payment option on a pension plan.
The third type of payment option is a period certain. This means exactly what it states,
the company will give you a period of certain income, if you pass away before that period
the income goes to your beneficiaries. If you live past that certain period, then the
income payments stop (some options include life only with period certain allowing income
for life with additional peace of mind that you can leave an inheritance). This is equivalent
to taking a period certain option through your pension.
One of the best tricks on how to obtain larger income payments through retirement even if
you are given a pension option is to compare the two.
A pension is a type of retirement account determined by the business entity for the
employee. Money was placed aside and after years of service, is turned on through an
income stream for the employee to typically not outlive. Because of the various economic
changes, we have seen that companies are starting to run away from pension plans because of
the risk involved. If you were to compare receiving income payments
through a pension option through work or deciding to take the company’s lump sum option and
place those funds into an immediate annuity. The typical immediate annuity income stream
produces a higher payout in 90% of the cases! So whenever you are viewing your company’s
pension options, be on the lookout for a lump sum payment option and give us a call (1-800-566-1002
or visit www.retiresharp.com/annuity). We will compare the best annuities side by
side and determine whether or not you fall into the 90% of retirees obtaining higher
income payments utilizing this method. View our other literature on Fixed Annuity, Variable
Annuity, Fixed-Index Annuity, and Hybrid Annuity for further comprehension on which annuity
is best for your situation!!!
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