Americans are living longer. Consequently, they are spending more time in retirement, with the average person enjoying 20 years of life after they stop working.
But those longer lifespans require that we prepare for all these years and make sure our nest eggs will adequately cover this time.
One way to do that is with a fixed annuity. This typically safe money option can help provide you or your loved one with a comfortable retirement.
An annuity is a contract issued by an insurance company that allows an individual to set aside money with a fixed rate of return and have it grow on a tax-deferred basis for future use.
As you enter your golden years, you withdraw the money as needed, or you can turn the value of your annuity into a regularly paid income that is guaranteed to last the remainder of your life (and for some or all of your loved one’s life too, if applicable).
The fact that you don’t have to pay taxes on the annuity earnings until you withdraw them allows your money to work for you without being taxed each year.
Most financial planners agree that you will need to replace 70-90% of your pre-retirement income to maintain your current standard of living.
Therefore, if you earn $70,000 a year before retirement, you will need to set aside $49,000 to $63,000 for each retired year. Be aware that you also need to account for the impact of inflation in your retirement planning.
You may also want to consider an equity-index annuity. The equity-index annuity’s interest rates are directly linked to the performance of an index, like the S&P 500.
When the market is up, you benefit. If it drops, your interest rate should never fall below the equity-index annuity’s guaranteed minimum, so you are protected.
We can help you find a plan that fits your individual needs, and will assist you in planning for a comfortable retirement, making all those years of hard work pay off.
Note: Liquidated earnings are subject to ordinary income tax, may be subject to surrender charges and, if taken prior to age 59 1⁄2, may be subject to a 10% federal income tax penalty.