Broker Check

The Importance and Future of Annuities

| February 02, 2017
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Living Longer

Flies live just a couple of days. Bowhead whales live to be 200 years. For humans, our life expectancy was 89 in the 1970s. Scientists are now saying the average life span for us will be 97 years old.

With people living longer, we need guaranteed lifetime income to supplement Social Security payments. Social Security is only supposed to be a supplemental federal assistance for the elderly.

Employers are moving away from offering typical pensions. Some offer 401(k)s with Qualified Longevity Annuity Contracts (QLACs are future income payments that are guaranteed for life). While this is a good start, the most you can put in is $125,000.

What else is out there that can increase your savings?

Longevity Annuity

The financial product that comes to our rescue to ensure a lifetimes income stream, no matter how long you may live, is an annuity that is contractually structured for lifetime payments. If you end up living way past the average life expectancy, that’s ok, the annuity company is required to pay for as long as you are alive.

Types of Annuities

An annuity can provide an endless pension-like income stream. Annuities are income insurance. In addition to the Qualified Longevity Annuity Contracts (QLACs) mentioned above, here are a few other types:

  • Single Premium Immediate Annuities (SPIAs): This is usually purchased in order to convert assets from savings and investments, selling a business, rollovers or payouts from a pension plan into a guaranteed stream of payments for retirement income.
  • Deferred Income Annuities (DIAs): Income starts as soon as 13 months from the date the contract was issues. It can be up to 40 years. It’s also referred to as a longevity annuity.
  • Charitable Gift Annuities (CGAs): Provide a lifetime income stream while giving you a significant tax benefit and a philanthropic donation to your chosen charity, university, or non-profit. They can provide major tax benefits.
  • Income Riders: Attached contractual benefits to some indexed and variable annuity policies that guarantee payments to start at a future date.

Let’s Talk

So, protect your savings and generate a stream of income. Contact us today to learn more!

 

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