FAQs

What is insured income?

Insured income is a way to transfer the risk of outliving your money to an insurance company by purchasing an annuity. By taking a portion of your resources to produce income to cover all or some of your most basic needs, you will be reducing the chance that you will run out of money. Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.

Will I be at the whim of the market?

Fixed annuities generally offer a guaranteed rate of return, but variable annuities may involve some market risk. Some variable annuities offer riders that allow you to protect your income while still participating in potential market growth. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.

What if my account loses value and I unexpectedly pass away before I begin taking income?

You decide when you enter into an annuity contract how the money will be distributed if you were to unexpectedly pass away. Some annuities guarantee payments for a set period of time, like a certain number of years or a lifetime, while others may provide a lump sum death benefit to your beneficiaries. We can help you choose the contract that best fits your goals.

Let’s look at an example.

Joseph and Mary are 65 years old and have investment accounts totaling one million dollars. They are looking to retire within the next few years, but they are concerned that they may not have enough money to last them their full retirement, which is projected to be over 20 years.

The thought of the uncertainty weighs on them and is preventing them from committing to a date to retire. They want to know that they will be able to retire safely with the greatest amount of certainty possible. They also want to know if they will need to move or downsize their home in order to meet their needs.

This state of not knowing the answers to these fundamental questions move them to reach out for some professional help.

Working with a professional planner and wealth manager they are able to put concrete lines around their situation and build a strategy to give them confidence in their retirement.

As part of their plan it is determined that after social security they will still need an additional $1,200 a month to cover their basic needs. With this knowledge they decide to move a portion of their investments into an annuity to cover the monthly shortfall.

With their basic needs now covered they are able to more easily construct a spending plan for their leisure and entertainment with less need to worry about paying for their day to day living expenses.

With this added confidence Joseph and Mary decide to retire at the end of the year.