What About Annuities? Guaranteed Income for Life
When it comes to creating a reliable, steady stream of income for retirement, annuities are a no-brainer. Annuities take the money you’ve earned—whether it’s in the market, savings, or an inheritance—and convert it into guaranteed income for life.
How Do Annuities Work?
Annuities are financial products offered by billion-dollar insurance companies that are designed to pay you income for the rest of your life. Here’s the key:
• You Can’t Lose Money:
With an indexed annuity, your money grows when the stock market goes up, but when the market goes down, you don’t lose anything. As they say:
“Zero is your hero.”
• Annuitizing Your Money:
When you’re ready to start receiving payments (like at retirement), the annuity turns into a steady stream of income—and that income is guaranteed for life.
Why Don’t More People Have Annuities?
You’d be surprised how common annuities actually are:
• State Employees & Government Workers:
Many public pensions are structured as annuities. When employees retire, their funds are converted into annuities to provide lifelong income.
• Similar to Ancient Pensions:
The Romans used a similar system to pay their soldiers after years of service. Annuities are not new—they’ve been securing financial futures for centuries.
Why Some Financial Advisors Avoid Annuities
So why don’t you hear about annuities more often?
• Financial Advisors Have Other Interests:
Financial managers earn fees based on the amount of money they manage. Even if your investments lose money, they still get paid.
• Annuities, on the other hand, take that money out of their control and place it with insurance companies that guarantee you won’t lose a dime.
• Annuities Are Insurance Products:
Advisors who focus on market-based returns may dislike annuities because they offer safety and stability instead of chasing higher (but riskier) gains.
Benefits of Annuities
Here’s why an annuity makes sense, especially as you approach retirement:
1. Guaranteed Income for Life:
• You’ll never run out of money, no matter how long you live.
2. Protection from Market Losses:
• Your principal is safe. When the market drops, you don’t lose a penny.
3. Tax Advantages:
• With after-tax money, you’re only taxed on interest earned.
• For 401(k) rollovers, taxes apply as usual, but the annuity ensures income stability.
4. Flexibility:
• You control how much income you receive and when you start receiving it.
5. Beneficiary Protection:
• If you don’t live as long as expected, your beneficiaries receive the remaining funds.
How to Use Annuities
1. Rolling Over a 401(k)
If you’re nearing retirement age, you can roll over your 401(k) into an annuity before you retire.
• Example: At 59, you move your money into an annuity. By 65, that money has grown, and you can “turn on the tap” for monthly income.
2. Converting Savings or Inheritance
Let’s say you’re blessed with a lump-sum inheritance. You can:
• Move the funds into an annuity for guaranteed income.
• Or roll the money into an insurance policy to borrow against it tax-free.
Why Annuities Are Worth It
If you’re pulling 4% annually from market-based accounts, you’re risking running out of money if you live into your late 90s or beyond.
With an annuity:
• You’re guaranteed to never run out of money.
• You can withdraw more than you initially put in.
• Your family remains protected with beneficiary payouts.
Take Action Now
If you’re ready to secure guaranteed income for life, don’t wait. Here’s what you need to do:
1. Visit EstateChecklist.com and fill out one of the contact forms.
2. Email me at estatechecklist@gmail.com.
3. Request my phone number to text or chat directly.
I’m licensed nationally and can help you set up the right annuity for your needs—whether via text, phone, or email.
Annuities guarantee you’ll never run out of money. Don’t leave your retirement to chance—take control today.