GMR 160: How to Create Protected Lifetime Income

Ensuring a consistent flow of income in retirement is important, and getting there safely requires having a variety of investments. In today’s GMR episode, we welcome back Harry N. Stout, author of The Financial Verse books series. We’ll learn how today’s annuity products can be a good option for guaranteed income for a portion of your retirement income.

Show Notes

Today’s Annuity: A Tool to Create Protected Lifetime Income

What are annuities?

  • An insurance product

  • About a quarter trillion sold in the US each year

  • Annuity companies are highly regulated

Benefits of Annuities

  • Tax Deferral

  • Principal Protection

  • Unlimited Contributions for Non-Qualified Annuities

  • Ability to Be Swapped Tax-Free

  • Probate Avoidance

  • Access to Cash When Needed

  • Offset to Longevity Risk

  • Guaranteed Protected Income*

  • Death Benefits

  • Nursing Home, Long-Term Care, and Terminal Illness Benefits

Types of Annuities

  • Fixed Annuities

  • Variable Annuities

  • Buffered or Structured Annuities

  • Fixed Indexed Annuities

  • Immediate Income Annuities

  • Deferred Income Annuities and QLACs

Major positives and negatives to buying annuities

  • The Positives

    •  Produce higher returns than many other fixed-income options

    •  Option for guaranteed lifetime income

    •  Offer a variety of payout options

    •  Tax-deferred income accumulation

    •  Can have guaranteed/predictable rates of return

    •  Can have principal protection and no risk of principal to market volatility

    •  All 100% of premiums work to generate interest

    • Available contract riders

  • The Negatives

    •  Some products have fees and charges

    •  Restricted access to cash

    •  No capital gains tax rates on earnings

    •  Contractual bonuses come with strings attached

    •  Additional income taxes for withdrawals prior to age 59-and-a-half

    •  No additional tax benefit for qualified funds

    • Complexity

Where can you buy annuities?  How difficult is it to purchase the product?

  • The Places You’ll Look – The Purchase Channels

  • Be Sure to Ask Key Questions to Ask Before You Buy

  • The Five Steps to Purchasing An Annuity

Resources

Harry N. Stout Website - www.financialverse.com
Today’s Annuity Products: A Tool to Create Protected Lifetime Income
Financial Verse Books by Harry N. Stout
Budgeting tools and other free resources - https://leosabo.com/resources
David’s website - www.stewardshippastors.com

Retirement SavingsLeo SaboInvesting, Saving for RetirementComment