Step 4: Learn how to create a plan that includes income you can’t outlive
It starts with a solid foundation
79% of Americans say having a guarantee of monthly income for the rest of their life is important to them.
An annuity can be a cornerstone of retirement
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The planning for retirement, there are really two major aspects to consider.The first aspect is you must begin to think about what will you be doing upon retirement.
I'm not an idle person. I've got to keep active. I work out. I do upper body three times a week and jogging.
And the other side of it of course is the financial. I think you will find that upon retirement, there's so many other financial issues that you did not think of. I can't emphasize that enough.
I urge everybody when they're approaching retirement, do some careful thinking.
Your income, your choices
Your Income Options
- Can be set up for just you or you and a partner.
- Income can be for life or a set period of time.
- Income may be accessible in other ways such as systematic withdrawals depending on your contract;
- Income tax will be due at the time income or withdrawals are taken, plus a possible federal 10% penalty if you make a withdrawal before age 59½.
- Once you set up lifetime or period certain income that balance is not available for income under other distribution options.
- You cannot change the annuity option or annuity partner once you begin receiving income.
- Features can be added to allow income to continue to beneficiaries for a specified period; adding this benefit will reduce the initial income amount.
Fixed vs. Variable Annuities
- Fixed annuity income is consistent, reliable and guaranteed. For a fixed annuity the insurance company, not contract owner, assumes risk.
- Variable annuity income is not guaranteed but has the potential to grow over time. The amount of each payment will fluctuate based on underlying investment performance. You assume the decision-making for the investments.