Guaranteed Annuity Income in Retirement

Guaranteed lifetime income can be generated from single premium immediate annuities (SPIA) or deferred income annuities (DIA) as well as guaranteed lifetime withdrawal benefit (GLWB) riders attached to an indexed annuity. The inventory of insurance companies who manufacture annuities that offer guaranteed lifetime income is extensive. There are many online annuity boutiques that display these types of annuities.

One of these firms is CANNEX. Until you run various scenarios, you don’t know if the SPIA, DIA or GLWB rider wins the day. CANNEX not only displays these types of annuities, but it calculates payout scenarios under life only (one life) and joint-life only (two lives). Payout scenarios can be lifetime, lifetime with 5, 10, 15 or 20 years certain. They can include a cash or installment refund. Watch the interview with popular platform speaker, best-selling author and PBS host Tom Hegna, who talks about annuity distribution options. http://rightonthemoneyshow.com/guaranteed-annuity-income-in-retirement-tom-hegna/

As an example: a male and female, both age 70 with a $100,000 deposit are reviewing their monthly payout options based on both their lives. Life only is $524, life only with 10 Years certain is $522 and life only with 20 years certain is $499.¹ The stated payout rate for a 70 year old may be 6.29 percent. That’s not to be confused with the actual rate of return, which may be around 3.5 percent based on the annuitant’s life expectancy. But buying blocks of income to fit your retirement timeline is an excellent way to establish, at the very least, a financial floor that addresses your domestic spending requirements throughout your entire retirement.

¹ Annuities, Power Point Presentation January 2016 Tom Hegna