Protection Benefits

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Guaranteed* Income Annuity Benefits

When it comes to retirement income, an annuity could be a good alternative to traditional accounts. It can present retirees with the option of fixed regular payments. So how does utilizing annuities for retirement work? Well, first, let’s discuss exactly what an annuity is.

Using an Income Rider on Your FIA​

You can use a fixed indexed annuity (FIA) to arrange ongoing income payments. The payment is typically a fixed withdrawal amount, although you might also have the option of using an income rider. With an income rider, your payments will increase to compensate for inflation and other costs. In other words, your guaranteed* income annuity may be set up to have a pay raise for you. This is one way retirees can manage increases in living expenses, medical costs, or other issues.

Income riders do have limitations, of course. Make sure that you understand not only the upsides, but the potential downsides to them as well. Here at AGM Secure Money, we can help educate you on how different insurance products could impact your unique financial situation.

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Keeping Your Money Safe

FIAs allow for lots of flexibility. The amount of choice they allow you is just another reason why they’re a common product for retirees to consider. Another reason they’re considered so reliable, though, is how safe they are in certain ways. You aren’t at risk if the stock market crashes, the insurance company is. FIAs allow you to secure your future retirement because of these benefits. When you pass away, your death benefit can also go to your loved ones without going through probate court.

The accumulation phase of an FIA typically lasts at least 5 years. By following the terms of your agreement, you avoid surrender charges. During this period, your interest credit on the annuity contract is also safe. You might choose to make this growth phase last longer, in order to possibly increase your earnings. Call us to make an appointment or attend one of our educational seminars to learn more.

Guaranteed* income can be achieved with an FIA. But in the accumulation stage, money should be kept in the account. Withdrawing money early could cause you to face large taxation. After the accumulation phase ends, though, you may take money out of your FIA with no additional fees. Be sure to contact us and learn about the specifics, and whether an FIA could be right for you.

In most cases, you get to choose whether you receive your income payments monthly or yearly. There are tax impacts to consider with each choice. You may even choose to simply keep the money in the FIA without taking any income payments. This would allow for even more additional growth. At our events, we can review these topics, and more. But, although we can meet with you to discuss retirement planning, be sure to contact a tax advisor for any tax-specific questions.

After Your Lifetime Benefits

You may be able to leave your annuity value to your spouse or other designated person after you’ve passed away. Some annuities provide a death benefit as well. You may be able to take advantage of this, even if you’ve already taken income payments. For example, some retirees plan on leaving income for their spouse from an FIA after they pass away. Others choose lump sum payment options. But no matter what you choose to do, we’re here to help guide you.

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