Guaranteed Lifetime Income

Is having enough money for retirement one of your concerns?  It’s normal to be anxious about providing for a comfortable retirement lifestyle.  A guaranteed lifetime income stream can provide you with freedom, financial security, and peace of mind.

When we retire, our financial focus shifts from accumulating assets to distributing assets. Your goal is to never run out of money. Annuities are a great investment vehicle used to preserve retirement assets, and supply you with income you cannot outlive.

It’s important to note that no singular retirement strategy works for everyone.  Furthermore, annuities differ by the lifetime income benefits they provide.  Let’s take a look at the basics.

Annuities for Retirement

Annuities are a great way to make sure you to never run out of money in your lifetime. Benefits include:

  • Lifetime income that you can never outlive (with a Guaranteed Income Rider)
  • Gains are “locked in” each year, and you can never lose your principal
  • Assets are protected by the Illinois Insurance Guaranty Association up to $500,000
  • Most offer an initial bonus on your deposit, usually between 5% and 10%
  • Growth potential on fixed and fixed-index annuities
  • Tax-deferred cash value accumulation
  • Protection from probate
  • Control of when you begin monthly income payments

Guaranteed Lifetime Riders

Lifetime income riders give fixed and fixed-index annuities more growth potential and more flexibility. While some income riders have no fee attached, others may cost about 1%. The key benefit may be lifetime income, but exactly how much income can they provide? Well it’s a combination of several things. First and foremost is the amount that was initially deposited. Then the bonus on the initial deposit. Finally the Income Rider has a minimum guaranteed interest rate, currently 5% to 7.5% compounded annually.

Here’s an example: Bob deposits $100,000 into an annuity with a 10% bonus, a 7% income rider, and he delays drawing income for 10 years. The beginning amount is $100,000 + 8% = $108,000. $108,000 compounded at 7% annually for 10 years gives us an income base of $212,452.35. That’s a guaranteed amount to start our income from, no worry about market fluctuations, and it is locked in and can never lose value.

In Conclusion

One of the biggest concerns for retirees is “Will I run out of money in retirement?” Consumers see that guaranteed lifetime income products offer peace of mind and make managing a budget easier during retirement. On the other hand, if you have exceeded the limits on your other tax-advantaged retirement investment options, try considering the tax-deferred benefits of annuities.

If you decide lifetime income is appropriate for you, consult the retirement professionals at MedicareTalk. We will walk you through your options, and explain how lifetime income can help you reach your retirement goals.


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For more information about establishing a guaranteed lifetime income, contact the insurance professionals at MedicareTalk during normal business hours at (815) 861-8630 or contact us through our website at your convenience.