A protected annuity is a type of investment that offers security and peace of mind for retirees. It is designed to provide a guaranteed lifetime income, which can help protect your retirement savings from inflation and market fluctuations. This guide will discuss the benefits of a protected annuity and how to choose the right one for you!
What Do Annuities Protect Against?
For most people, the biggest financial risk in retirement is longevity risk-the risk of outliving their savings. Annuities can provide retirees with a stream of income that lasts as long as they do, which can help to protect them against this risk. In addition, some annuities offer protection against inflation, ensuring that the payments keep pace with the cost of living.
What is a protected annuity?
There are a few different options to choose from regarding retirement income. You can opt for a traditional pension, an immediate annuity, or a protected annuity. A protected annuity is unique because it offers guaranteed lifetime income, no matter how long you live. As a result, your loved ones will not have to worry about outliving your retirement savings.
There are a few things to consider when choosing a protected annuity. First, you must decide how much income you need in retirement. This will help you determine the size of your annuity policy. Next, you must choose an insurance company that offers protected annuities. Again, do your research and compare different companies before deciding.
Related Reading: How much money do I need to retire?
What are the benefits of a protected annuity?
Some of the benefits of a protected annuity include:
- Guaranteed lifetime income
- Protection against inflation and market fluctuations
- Peace of mind for retirees and their loved ones.
What are the drawbacks of a protected annuity?
There are a few drawbacks to consider as well. First, you will need to pay taxes on your annuity income. Additionally, if you pass away before your annuity is fully paid out, your beneficiaries may not receive the remaining balance depending on how the payout is set up.
Next steps
A protected annuity may be suitable if you want a retirement income option that offers security and peace of mind! Contact us today to learn more about this type of policy.
Frequently Asked Questions
What is the difference between a traditional pension and a protected annuity?
A traditional pension provides a fixed income for life but does not protect against inflation or market fluctuations. On the other hand, a protected annuity offers a guaranteed lifetime income that can help protect your retirement savings from inflation and market fluctuations.
What is the protected income value in an annuity?
The protected income value in an annuity is the guaranteed minimum income you will receive for the rest of your life, no matter how long you live. This ensures that your loved ones will not worry about outliving your retirement savings. To determine the size of your annuity policy, you will need to decide how much income you need in retirement.
Is annuity protected from a lawsuit?
Yes, annuities are typically protected from lawsuits—however, some exceptions, such as if the annuity was purchased with fraudulent intent.
What is an example of a protected annuity?
An excellent example of a protected annuity would be an immediate annuity policy. This policy provides a guaranteed income for life, no matter how long you live. This can help to protect your retirement savings from inflation and market fluctuations.
What does Protected income mean?
Protected income is the minimum income you are guaranteed to receive from your annuity policy, no matter how long you live. This ensures that your loved ones will not worry about outliving your retirement savings.
Can creditors go after annuities?
Creditors typically cannot go after annuities—however, some exceptions, such as if the annuity was purchased with fraudulent intent.
What is a living benefit annuity?
A living benefit annuity is an annuity that provides a guaranteed income for life. This can help to protect your retirement savings from inflation and market fluctuations.