Why an Indexed Annuity Should Be Part of Your Retirement Plan?

There are two major challenges most retirees face today - lack of retirement savings or income and outliving your retirement savings.

Sources of Retirement

We frequently talk about the 3 traditional retirement income - pension, social security and personal savings.

3-Legged Stool of Retirement

Are Pensions Disappearing? Do You Have a Pension Plan?

In the 2013 Bureau of Labor Statistics reports, only 10% of private industry establishments offer defined benefit pension plans.

If you still have a pension plan, good for you.

Will Social Security Be Enough?

When Social Security first started in August 1935, there were 42 people working for every one retiree. Currently there is less than 3 people working for one.

Besides, people are also living much longer compared to 70 years ago.

Social Security is the largest source of income for most elderly Americans today. Unfortunately, it was never intended to be your only source of income when you retire.

With 2 of the 3 legs on the stool crumbling away, there has been a shift to personal responsibility.

Sources of Retirement Income

Did you know financial support from families is one of top 3 sources of retirement income? And most retirees were financially more worst off than before retirement?

Since you can’t rely on your company’s pension or social security, do you want to rely on your children, grandchildren, for your retirement?

They have their own share of financial responsibilities.

Are you saving enough for retirement?

Are We Saving Enough?

Most people would prefer to continue their preretirement lifestyle. Others choose to down size with hope that that will make their retirement income last longer.

How can an Indexed Annuity help solve your retirement dilemma?

An annuity (or income insurance) can provide you with income for life that you can’t outlive.

There are mainly two types of annuity - single premium immediate annuity and deferred annuity.

A single premium immediate annuity are most beneficial for someone who just retired and can roll over a lump sum of money from their companies’ 401(k) or Thrift Savings Account, or an individual retirement account (IRA).

The pay out starts one month after roll-over.

On the other hand, any individual can start contributing to a deferred annuity, that function similarly to an IRA. The money stays in the account and grow tax-deferred until a pre-defined time, usually at least 59 1/2.

When pay out starts, you get a monthly income for the rest of your life.

Another benefit of an indexed annuity is safety. Because your money in the annuity is not exposed to the stock market, your money is safe to grow tax-free.

With an indexed annuity, the insurance company assumes the risk of the market. While with variable annuity, you (the consumer) assumes the risk of the market.

If you, the contract owner, passes before payout starts, your benefit will payout to your beneficiaries as death benefit, just like life insurance.

Overall, an indexed annuity provides you with the security knowing that your money grows safely, you can a supplemental stream of cash flow that you cannot outlive.

Watch Tony Robbins talks about fixed indexed annuity.

Contact us to see how an indexed annuity fits into your retirement plan.

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