Annuity planning is an important function for anyone headed to retirement. Many insurance advisors will try to sell a product whether it fits or not. We try to make sure the product we align you with suits you and will ensure a happy retirement. More than likely if you are young you don’t have a real need for one of these stable income products. Also if you are younger than 45 you can let your equity accounts retract with the upcoming recession (market volatility) and still be good for retirement.
What is the main reason for annuities? Really they are insurance, for in the case that you live longer than expected and outlive your investments. You need guaranteed income when you are retired. Our lifespans have increased and we need to have money in addition to social security and our investments. Most people have not found the right financial advisor who has turned their portfolio into a high-income portfolio, and often that’s not their fault due to issues we have mentioned before such as poor bond yield rates and REITS dealing with an eviction moratorium and retail collapse. You also might be worried that you will run out of money even with systematic withdrawals from your assets during retirement.
Most candidates for annuity planning are between the ages of 50 and 64. This is the age where your assets have usually earned enough in your 401k and IRA that it might be the right time to annuitize some of your assets while leaving a majority of your assets to grow. Now is the time we want to transfer some of those assets for continued tax-deferred growth. Another part of our annuity planning is to ensure that we do not over or under fund the annuity. We want to keep the majority of your assets unconstrained for growth by the costs of insurance or taxes.
Annuity planning riders are part of making the annuity fit for you. The guaranteed withdrawal rider comes in two types, a guaranteed lifetime withdrawal benefit (GLWB), and a guaranteed minimum withdrawal benefit (GMWB). The next annuity rider is the Life Time Income Benefits rider that ensures you never outlive the annuity. The younger you are the more important the Life TIme Benefits rider is to ensure you do not outlive it as many annuities have 10 or 20 year periods as they sometimes are used as supplements early in retirement so one can start social security at a later age.
One annuity planning rider that is important if you are concerned with survivorship. This is who you want the annuity to go to after you pass and what percentage you want to be given to the survivor. Passing on less to the survivor gives you a higher income from the annuity. Also, we might add a death benefit rider so you can pass it on to your heirs if the annuity has not exhausted its funds. Another annuity planning rider is the COLA or Cost of Living rider ensuring that your money keeps pace with the rate of inflation.
Our recommendations for ages 50 through 64 is usually an equity-indexed annuity so you can participate in further market growth before you retire. If you are 65 and above and are worried about the current market conditions we usually try to advise for an immediate fixed income annuity that will gain a good interest rate and pay you right away. An immediate fixed income annuity is usually the best tool for retirees that have already entered retirement.
Also, we try to see if Long Term Care is a worry or need of yours and ensure if it is that we place a long term care rider on the annuity to give you funding for long term care in the later years of your life. Long term care pays for home care, adult day care, assisted living, hospice care, respite care, nursing home, Alzheimer’s facilities, and home modification to accommodate disabilities. If home care coverage is purchased, long-term care insurance can pay for home care, often from the first day it is needed. We feel placing a long term care rider in an annuity or universal life insurance makes more sense than buying long term care on it’s own.
Sit down with us to plan because what we have is better than any annuity calculator you will find on the internet. Our annuity planning software will give you the future value of your annuity based on past performance. You will be amazed at all the products you get to choose from high-quality companies. We don’t quote annuities off our website due to being more complicated and we have multiple sources we quote from to find the best one for you.
I am a term life, infinity banking concept, indexed universal life insurance, and annuities advisor. I am looking to give Utahans a choice in life insurance as an independent advisor. I represent over 25 different insurance carriers on your behalf so we can find which one will approve you for the best policy. I started this company (Wasatch Smart Finance) so people like you could finally get honest answers & advice from advisors who have a comprehensive knowledge of finance and estate issues. Also as a Veteran, I want to assist other Veterans in their financial journeys.