Does a Guaranteed Retirement Income Offers a Longer and Happier Life?

Guaranteed Retirement Income Offers Longer, Happier Lives

 

According to a Wall Street Journal study published many years ago, retirees that have a decent check guaranteed each month for life, while being surrounded by friends and family make them much happier. Additionally, it shows they live longer too.

Since the biggest worry for retirees is funds running out, this makes sense. Therefore, people that have a set income removed for life, have less to stress over.

In the past, a traditional pension and Social Security offered retirees enough to live on. However, less employers are offering pensions, making employees fully responsible for saving. Meanwhile, Social Security is only around 40% of the average pre-retirement income amount.

How do to receive additional guaranteed retirement income?

The answer is annuities, which is a commonly overlooked option. The majority of annuities provide options for guaranteed income for life. Additionally, some allow you to have a joint income recipient, that way a spouse is able to receive guaranteed income for life too.

According to a study by LIMRA Secure Retirement Institute, annuities are shown to offer financial and psychic benefits. Those with retired annuities often have more confidence that they can afford their lifestyle compared to retirees that are now owners of retirement annuities.

Out of retirees with annuities, 73% are confident they can afford the retirement lifestyle they desire, whereas only 64% without an annuity feel they can afford retirement. Therefore, almost 7 out of 10 retirees with an annuity believe their investments and savings are enough to last a lifetime, without running out – even living to be in their 90s. Meanwhile, almost 6 out of 10 retirees that do not own an annuity, are not confident in a lifetime income, based on the 2016 LIMRA survey.

Therefore, an annuity provides an opportunity to develop a long-term, guaranteed income security while investing in a lifetime of happiness after retirement.

Retirement Planning

Although annuities are strong investments, they may not be best for you. You shouldn’t invest in annuities unless you’re sure it’s right for you. That is why retirement planning is important.

Prior to buying, ask the following:

• In addition to Social Security and other income sources, how much additional income will I need?
• Do I need supplemental income for another person?
• When am I expecting to need additional income payments?
• How long will I leave money in the annuity?
• Am I allowed access to annuity funds if I need it?
• What will I use funds for, generating retirement income, saving for retirement, or both?
• Will I have the cash reserves for meeting expected requirements?

 

Retirement Plans

After asking yourself these questions and deciding an annuity is your best option, you can begin choosing the type of annuity best for your situation.

There are many types of annuities available, understanding your expectations and needs will be important to choosing the plan that’s best for you.

Various annuity plans provide guaranteed principal and interest rates. However, others do not guarantee principal or earnings, but offer the opportunity of higher returns. These are riskier.

Additionally, an immediate annuity starts to pay income within a year. If you’re saving for retirement, a deferred annuity allows you to deposit funds for years prior to beginning to receive payments from the annuity.

Like vehicles, all models can get you from start to finish, but only certain models will be the best fit for your individual requirements through the offered benefits and features.

Funding Your Retirement Income

Finally, annuities may be purchased using a lump-sump payment through cash or rolling over funds from another source, such as a 401k, IRA, or other retirement accounts. Also, you could decide to make small regular deposits over many years, until you decide you need to begin withdrawing – and you pay no taxes on annuity earnings.