There are many things to consider when it comes to guaranteed retirement income. How much money will you need? What kind of guaranteed retirement income plan is best for you? How can you ensure your money will last throughout your retirement years? In this guide, we will answer these questions and more! We will discuss how to empower retirement by investing in guaranteed retirement income and the different types of plans available. We will also discuss the importance of financial planning and how to empower yourself for a secure retirement.
You will learn how to:
- Save money towards retirement in an efficient way.
- See a clear path to the desired retirement income in the future, guaranteed.
- Tax recommendations to minimize income taxes during retirement.
- Eliminate the guesswork from investment outcomes.
This retirement plan is ideal for:
- Empower Retirement By Doing It Yourself
- Empower Retirement By Guaranteeing Your Future Retirement, TODAY
- Are There Any Guaranteed Investments?
- What Is A Guaranteed Retirement Plan?
- Are Retirement Accounts Guaranteed?
- How Do You Get Guaranteed Retirement Income?
- What Percentage Of Retirement Income Should Be Guaranteed?
- What Is The Most Secure Retirement Plan?
- Where Is The Safest Place To Put Your Retirement Money?
- Can You Live Off Interest In Retirement?
- Creating A Retirement Roadmap
- Retirement Projection Calculator
- Saving And Planning For Retirement By Age
- Retirement Planning Tips
- Next Steps
- Frequently Asked Questions
- Related Reading
- Request A Quote
Empower Retirement By Doing It Yourself
Most Americans invest their retirement savings into an individual retirement account (IRA) or 401k retirement plan from a paycheck, not knowing various future investment outcomes. The problem with this financial strategy is the inability to
- accurately calculate how much to save for retirement,
- decide on the investing options along the way, and
- hoping not to lose money.
Another problem with this method is that once an employee nears full retirement age, that individual must decide how to live on their 401k or IRA and figure out how to stretch their nest egg out for the rest of their lives.
What if the individual hasn’t saved enough in their retirement plan? Must they downsize their lifestyle because they didn’t invest correctly?
Empowerment means control. By planning for retirement yourself, you control your destiny. You dictate where your future lies.
Empower Retirement By Guaranteeing Your Future Retirement, TODAY
To retire, a person needs money to finance their retirement. Unfortunately, there are currently only two retirement savings plans guarantee an income for life: Social Security and Annuities. These two vehicles allow you to empower retirement and plan your future finances today.
Social Security
Currently, Social Security provides a guaranteed retirement paycheck to every working American. However, a considerable disadvantage is that a person who hasn’t retired yet can’t control the amount of future income generated from Social Security Benefits, leaving some guesswork.
Another argument would be if the program would still be around in the future or change entirely from today’s standards, which could be a massive wrench in any plan.
Annuities
Currently, annuities are the only retirement plan that guarantees a paycheck for an entire lifetime or lifetimes, even if there is zero money left in the account.
Annuity owners can control the amount of desired income they receive in the future through deferred annuity plans. Utilizing this insurance policy also allows a person to guarantee their desired retirement age, starting today, leaving zero guesswork in determining how long money will last in retirement tomorrow.
Are There Any Guaranteed Investments?
You work hard for your money. You want to ensure that it will be there when you need it – whether for retirement, a rainy day fund, or something else.
So, are there any guaranteed investments?
- Fixed and fixed index annuities offer a fixed rate of return, so you know exactly how much money you’ll have at the end of the term.
- CDs are also a relatively safe investment, although they may not offer the same rate of return as other options.
- Money market accounts are another option – although the interest rate may be lower than other options, your money is still FDIC-insured.
So, while there’s no such thing as a 100% guaranteed investment, there are certainly options that come pretty close.
What Is A Guaranteed Retirement Plan?
A guaranteed retirement plan is a type of investment account that offers a guaranteed “stream of income” during retirement. It is similar to a traditional 401(k) or IRA, but with one key difference: the account owner is guaranteed to receive income payments each year for life.
This guaranteed lifetime income stream can cover living expenses, healthcare costs, or other needs during retirement.
There are only a few different types of guaranteed retirement plans, but they all share the common goal of providing a secure source of monthly income in retirement.
Are Retirement Accounts Guaranteed?
When it comes to retirement accounts, there are a lot of misconceptions floating around. For example, one common misconception is that retirement accounts are guaranteed.
Unfortunately, this is not the case.
While some programs provide insurance for retirement accounts, such as the FDIC for savings accounts and the SIPC for brokerages, these programs only protect against loss due to failure of the institution, not against loss due to market conditions.
So if the stock market crashes or interest rates rise, your retirement account could take a hit.
Are 401 K plans guaranteed?
Many consider their 401(k) a guaranteed retirement savings plan. But unfortunately, that is not the case.
A 401(k) is an employer-sponsored retirement account that allows employees to contribute a portion of their paycheck to a tax-deferred account. The money in the account can then be invested in various securities, such as stocks, bonds, and mutual funds.
While the money in a 401(k) account does grow tax-deferred, it is not guaranteed. The account value will fluctuate depending on the performance of the investments.
For these reasons, it is crucial to understand that a 401(k) is not a guaranteed retirement account. However, it can still be a valuable tool for building your nest egg.
How Do You Get Guaranteed Retirement Income?
Annuities are often overlooked as retirement planning tools, but they offer several unique benefits that can be incredibly valuable to retirees.
For one, annuities are the only retirement plan in the United States that offers guaranteed retirement income payments. So no matter how long you live, you will never outlive your retirement savings.
In addition, annuities offer tax-deferred growth, which means you can let your money grow without paying taxes on the gains.
What is a guaranteed lifetime withdrawal benefit?
A guaranteed lifetime withdrawal benefit (GLWB) is a feature of some retirement annuities (fixed index and variable annuities) that provides retirees with a stream of guaranteed income payments that cannot be outlived. In addition, some guaranteed lifetime withdrawal benefit plans offer an annual increase that keeps up with inflation, which can help to offset the rising cost of living.
What Percentage Of Retirement Income Should Be Guaranteed?
When it comes to retirement income planning, there’s no one-size-fits-all answer. Instead, your retirement income payments depend on various factors, including your lifestyle, health, and expected longevity.
However, most financial experts agree that a certain percentage of retirement income should be guaranteed. A guaranteed lifetime income stream can come from Social Security, pensions, or annuities.
This guaranteed income is necessary because it provides a base level of financial security in retirement. It can also help to cover essential expenses, such as housing and healthcare.
Consider how much guaranteed lifetime income you’ll need to maintain your desired lifestyle when making retirement plans.
What Is The Most Secure Retirement Plan?
Annuities offer several benefits that make them an attractive option for many people.
- First, annuities offer a guaranteed income stream for life. You will not have to worry about outliving your retirement assets.
- Second, annuities are tax-deferred, so you will not have to pay ordinary income tax on your investment until you receive payments.
- Finally, annuities offer death benefits and spousal benefits that can help to provide financial security for your loved ones.
For these reasons, annuities are often considered the most secure retirement plan.
Where Is The Safest Place To Put Your Retirement Money?
There are many different options for retirement planning, and it can be tough to know which is the best for you.
- However, if you’re looking for a safe investment portfolio that will provide a guaranteed income stream, an annuity with a lifetime income rider is the way to go. With this type of annuity contract, your payments are guaranteed no matter how long you live, so you can rest assured that your retirement savings will never run out.
- Similarly, a fixed annuity is the way to go if you’re looking for a fixed interest rate on your retirement savings. With this type of annuity, your interest is guaranteed for a set period of time, so you know exactly how much money you’ll earn each year.
- Finally, if you’re looking for an investment that has the potential to grow over time, a fixed index annuity is the right choice for you. With this type of annuity, your savings are linked to popular indexes such as the S&P 500 or the Dow Jones Industrial Average so that you can benefit from their performance. Index annuities do not lose money to market volatility and should not be confused with a variable annuity (which can lose money).
Whichever type of annuity you choose, you can rest assured that your retirement savings are safe and sound.
Can You Live Off Interest In Retirement?
When it comes to retirement planning, there are a lot of factors to consider. One crucial question is how you will generate lifetime income in retirement. For many people, the answer is to live off the interest from their savings. However, this can be challenging, with interest rates currently at historic lows. To live off the interest from your savings, you will need to reduce your lifestyle dramatically or invest a massive amount of money.
Fixed annuities offer the highest interest rates among guaranteed return investment accounts if your investment objectives are to live off the interest and preserve the principal.
There are three smart steps that an individual can take to empower retirement planning and avoid any longevity risk.
Creating A Retirement Roadmap
Step #1: Calculate Social Security Benefits
The first step is to calculate future Social security Benefits. The calculations generated aren’t guaranteed but will provide a rough estimate of how much income you can collect in the future.
Step #2: Find the Perfect Annuity
The participant’s current age, desired future income amount, and target retirement age will determine which annuity is the best for the participant’s situation and create a roadmap to follow. Utilize the annuity to enhance protection to offset some potential reductions in the Social Security Income just in case.
Open two deferred annuity contracts:
Open two separate deferred annuities to minimize taxes in retirement. Adding extra layers of income sources will enable added security to maintain the cost of living adjustments.
- Roth IRA Annuity: Lifetime income payments to you will be tax-free for life. Maximize contributions each year to this contract first.
- Non-Qualified Annuity: With non-qualified annuities, only the interest earned will be subject to income taxes. Everything else is not taxable.
Helpful Tip: Variable annuities may lose value due to market fluctuations. To prevent losing money, utilize a fixed indexed annuity with a lifetime income rider.
Step #3: Follow The Roadmap
Once the retirement roadmap is created, follow the steps exactly as laid out to achieve an optimized experience.
- It’s ok to increase the contributions to improve future results.
- It is not ok to decrease the contributions to the retirement plan because this reduces your monthly income in retirement.
If calculating the retirement income amount is overwhelming, start by determining the current essential monthly expenses needed to survive.
To calculate the income generated from the annuity, use the current essential monthly expense amount, then subtract the estimated monthly Social Security Benefits. The remainder will be the starting point to calculate the desired guaranteed income for life.
One could also include an inflation rate of 3% a year between now and the desired target retirement rate to calculate a more accurate income.
Current Expenses – Social Security + Inflation = Annuity Income To Solve For
Retirement Projection Calculator
One of the best ways to ensure a comfortable retirement is to purchase an annuity. An annuity insurance policy will provide you with a guaranteed fixed income for the rest of your life, which can help to ease worries about outliving your savings.
Estimating how much money you will need to save for retirement can be tricky, but our projected-retirement calculator can give you a good idea of what you’ll need to have set aside. Once you know how much you need to save, you can start investing in an annuity and enjoy the peace of mind that comes with knowing you have a steady income stream in retirement.
Saving And Planning For Retirement By Age
The following guides teach the stages of retirement planning. Learn how to plan and save for retirement in your twenties, thirties, forties, fifties, and sixties.
Your 20s
Your 30s
Your 40s
Your 50s
Your 60s
Retirement Planning Tips
Wait Until Full Retirement Age
Don’t make the mistake of taking SSI early. Defer benefits until the full Social Security retirement age or age 70. A reduction in benefits will affect an individual later in life when long-term care is needed. Long Term Care costs are costly, and a 70% chance a person will need the care.
Roth IRA Annuities Eliminates Taxes In Retirement
Set up a Roth IRA Annuity first. Income from a Roth IRA Annuity will be tax-free if you follow the IRS guidelines. An individual can contribute up to $7,000 annually, depending on the person’s age. Fund this annuity contract first, and other annuities after the maximum contributions are met.
Non-Qualified Annuities Reduces Taxes In Retirement
After the Roth IRA Annuity has been fully funded each year, set up and fund the non-qualified annuity. There are typically little to no contribution limits with a flexible-premium annuity. In addition, non-qualified annuities are funded by already taxed money, and only the interest earned will be taxed once you generate income during retirement.
The consensus is that taxes will only increase in the future. Higher taxes result in less income for the retiree. A non-qualified annuity reduces this risk compared to a traditional IRA or IRA annuity because only the interest is taxed instead of the entire amount.
Buy Life Insurance To Protect Your Family
Buy a life insurance policy. Protect loved ones financially starting today if the retirement plan fails because of early death. Find the highest death benefit possible at the cheapest cost.
Next Steps
Annuities are a great way to provide a guaranteed income stream in retirement. Plus, they offer tax-deferred growth and death benefits that can provide security for your loved ones. Contact us today for a quote if you’re interested in learning more about annuities. We would be happy to discuss the options available and help you find the best solution for your needs. Thank you for reading!
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Frequently Asked Questions
What is a guaranteed retirement account?
A GRA is a retirement investment that will generate a guaranteed income for life regardless of market volatility. That means that no matter how long you live, you’ll have a stream of annuity income to support yourself in retirement.
What is a guaranteed income annuity?
A guaranteed income annuity guarantees a payout for a guaranteed period or the duration of the annuitant’s life, no matter how long they live. This type of annuity is often used as part of a retirement plan, as it can provide a steady income stream that can help cover basic living expenses.
What is the best source of retirement income?
One of the best sources of retirement income is an annuity. An annuity is an insurance product that can provide a stream of payments for a set period of time or the rest of your life. When you purchase an annuity, you pay a lump sum, and the issuing insurance company agrees to make periodic payments to you, either for a set period or for as long as you live. However, before purchasing an annuity, it is important to understand the claims-paying ability of the issuing insurance company, as this will affect your ability to receive payments in the future.
Is a pension a guaranteed retirement plan?
For many workers, a traditional pension plan is essential to their retirement planning. These workplace retirement plans utilize an annuity contract to provide lifetime income to retired workers. Pension benefits can be an important retirement income source, and traditional pension plans are often one of the most generous income sources available.