A MassMutual RetireEase single premium immediate fixed annuity offers a way to add a source of guaranteed income to the predictable income portion of your retirement portfolio.
Why RetireEase?
Guaranteed income.
In exchange for a single purchase payment, you receive a stream of guaranteed income that begins immediately (up to 12 months after the date your contract is issued).
You can receive guaranteed income for life, for a specific length of time, or a combination of both, depending on the annuity option you choose.
Predictability.
RetireEase provides a reliable source of income that is not affected by fluctuations in the stock market. At the time you purchase a contract, you know how much income you will receive.
Tax efficiency.
If you’ve already paid taxes on the money used to purchase your annuity contract, a portion of each annuity payment will be tax-free until the total amount of income you’ve received equals the amount of your single purchase payment.
Flexibility.
RetireEase offers you a certain amount of flexibility, including the ability to:
Add an inflation protection feature.
When elected, MassMutual Inflation Protector will automatically increase income payments by your choice of one, two, three, or four percent annually.
This feature may only be added at the time you purchase your contract.
Adjust a period certain.
If you choose a period certain-only annuity option, you can decrease or increase the period of time you will receive income payments within contract limits.
Select an annuity option that includes beneficiary protection.
Annuity options that include a period certain, cash refund, or installment refund guarantee may protect your designated beneficiary in the event of your death.
Massmutual Life Insurance is also an inexpensive way to leave a death benefit to beneficiaries.
Guaranteed income starts here.
Step 1 — Select your annuity option.
Annuity payments can provide guaranteed income for life, a specific length of time, or a combination of both.
The best choice for you will depend on a variety of factors, including whether you need income for one life or two and whether leaving money to a beneficiary is important to you.
Single life
Payments are made for as long as the annuitant is alive and ends when the annuitant dies.
This lifetime income option does not provide beneficiary protection.
Joint and survivor life
Payments are made for as long as at least one annuitant is alive.
All payments end upon the death of both annuitants.
Period certain only
Payments are made for a guaranteed length of time (five to 50 years) called the “period certain.”
If the annuitant dies before the end of the period certain, any remaining scheduled annuity payments will be paid to the beneficiary named in the contract.
Annuity payments stop when the guaranteed period certain ends.
Lifetime income options
Lifetime income options provide longevity protection because they guarantee income you can’t outlive.
Options that include additional benefits, such as the ability to take withdrawals or beneficiary protection, will generally affect the amount of income you receive.
Single life or joint and survivor life with a period certain
Payments are made for the life (or lives) of the annuitant (or joint annuitants), but payments are also guaranteed for a specific length of time.
If the annuitant (or annuitants) die before the end of the period certain, the beneficiary named in the contract will receive any payments remaining in the guaranteed period certain.
Example: Single life with a 10-year period certain — Annuity payments are guaranteed for a minimum of 10 years.
Single life or joint and survivor life with cash refund
Payments are made as long as an annuitant is alive.
If the annuitant (or joint annuitants) die before the total amount of income payments received equals the single premium amount paid for the contract, the difference will be paid in a lump sum to the named beneficiary.
Single life or joint and survivor life with installment refund
Payments are made for as long as the annuitant (or joint annuitants) are alive.
If the annuitant (or joint annuitants) die before an amount equal to the original purchase payment has been received as income, the designated beneficiary will receive the difference as scheduled annuity payments.
Joint and survivor life with reducing annuity payments at death
The surviving annuitant will receive reduced annuity payments for as long as he or she lives.
Reductions can be for one-half, two-thirds, or three-quarters of the original annuity payment amount.
You can choose whether the reduction happens upon the primary annuitant’s death or the first death (annuitant or joint annuitant).
Step 2 — Select a payment frequency.
You can choose the frequency of your annuity payments from among the following options:
- Monthly
- Quarterly
- Semiannually
- Annually
Step 3 — Evaluate additional features (Optional)
Cash withdrawals for period certain annuity options
Immediate fixed annuities can be a great choice if you need a stream of guaranteed income that begins immediately.
They are not the best choice if having access to the money in your contract is important to you.
RetireEase only permits withdrawals if the contract includes one of the following period certain annuity options:
- Period Certain Only — One full or partial withdrawal is allowed each year after the first contract year.
- Single or Joint Life with a Period Certain — One partial withdrawal is allowed each year after the first contract year.
Withdrawals are subject to certain restrictions and may incur surrender charges in contract years two through nine.
In addition, withdrawals may generate an income tax liability.
If the contract is purchased with qualified money (i.e., with assets from an IRA or 401(k) plan), withdrawals before age 59½ may be subject to an additional 10 percent federal income tax.
MassMutual Inflation Protector
This optional feature can help offset the effects of inflation on your annuity payment purchasing power.
If you elect it, this feature automatically increases the amount of your annuity payment by one, two, three, or four percent each year.
The higher the annual percentage increase, the lower the beginning annuity payments will be.
It’s important to weigh the trade-off between receiving lower beginning annuity payments that increase gradually each year and receiving a higher beginning annuity payment that does not increase over time.
You must decide whether to include this feature and choose the annual percentage increase at the time you purchase your contract.
Be sure to weigh the pros and cons of this feature adding it because you won’t be able to make changes after your contract is issued.
MassMutual Inflation Protector is not available with the Life with Installment Refund annuity option.
It may be limited or not available at all due to RMD rules.
Pension-Alternative
If you’re seeking a pension-like income in the future, but want more flexibility, check out an income rider. Annuities with an income rider provide guaranteed income for life with a death benefit for beneficiaries along with much more flexibility, access, growth potential, and control.
