Your Retirement Can Be Everything You Expect
At New York Life, we believe that your retirement years should be all that you hope for. Whether it includes travel, hobbies, volunteering, or spending time with family and friends, you'll need income to support the retirement lifestyle you've always imagined. That's why we offer Guaranteed Lifetime Income products—to help you enjoy peace of mind in your retirement, knowing that your retirement income will last as long as you live. That's the promise we make to you: retirement income that lasts. It's a promise that's as good as gold.
How Much Will You Need?
Most likely, your retirement income will come from Social Security benefits, your personal savings—and if you're lucky—a pension or other employer-sponsored plan. To determine how much money you'll need in retirement, consider the following:
- Day-to-day living expenses;
- Medical expenses, which may increase over time;
- Inflation, which can make a significant difference in future buying power;
- Personal hobbies and interests;
- Charitable contributions to support worthy causes; and
- Family gifting (e.g., to a grandchild).
A Better Way To Manage Risk
Some people prefer to manage their own savings, deciding in effect to "pay themselves" through their retirement by withdrawing their money as they need it. But even with a diversified portfolio of stocks, bonds, and CDs, there are risks—including market volatility and the chance that you may outlive your money. Keep in mind that the amount of income you'll need to maintain your lifestyle during retirement may be as much as 90% of the income you earned while working.1
To better manage these risks, you may want to consider purchasing a Lifetime Income Annuity from New York Life Insurance and Annuity Corporation, a wholly owned subsidiary of New York Life Insurance Company. The Lifetime Income Annuity is the flagship product of New York Life's Guaranteed Lifetime Income suite of products.
How a Lifetime Income Annuity Works
When you purchase a Lifetime Income Annuity, you receive guaranteed payments at regular intervals for as long as you live, no matter how long that may be, and no matter how the financial markets perform.
Consider the following example of how a Lifetime Income Annuity might work: If you're a 65-year-old male and you purchase a Lifetime Income Annuity with a premium of $100,000, you might receive payments of $697 per month, or $8,364 per year, for the rest of your life. And because this non-qualified annuity was purchased with after-tax dollars, only $3,372 of that annual income would be taxable. The remaining $4,992 would be treated as a return of your principal, which you would receive tax-free for approximately the next 20 years.2
How Your Income Payments Are Determined
For all Lifetime Income Annuities, the factors that determine the amount of payments you will receive include:
- The amount of your premium and the interest rate environment when you purchase your policy;
- The number of lives the policy covers (either one or two);
- Your age and gender (and those of the other person, for Joint Life policies);
- Any guaranteed minimum payment, inflation protection, change in income schedule, or legacy options you select;
- The frequency with which you choose to receive your income payments (monthly, quarterly, semi-annually, or annually); and
- The date on which your payments are scheduled to begin.3
Customize Your Lifetime Income Annuity To Meet Your Objectives
In addition to income for life, the Lifetime Income Annuity offers a combination of cutting-edge features4 that can address your retirement income concerns. You can choose from the following:5
Single Life Policy: Provides payments for the remainder of your life, regardless of how long you live. This option provides the highest income for any given premium, but payments cease upon death.
Joint Life Policy: Pays an income for as long as you or one other person—usually your spouse—continues to live. If one of you dies, payments will continue to the survivor for the rest of his or her lifetime. Of course, all else being equal, a given premium amount will provide a lower income if it is designed to last throughout the lives of two individuals, rather than one life alone. With this option, payments generally cease after both of you have died. You also have the flexibility to choose whether the survivor will continue to receive the same income that was paid while both of you were alive or only a portion (40% to 99%) of that amount.
You might decide, for example, that if one of you were to die, the survivor would need only 80% of the income that both of you previously required. Choosing this lower percentage may best meet your needs because a Joint Life policy that pays a smaller income to the survivor will provide a higher income while both of you are alive.
Single or Joint Life with Period Certain: Pays a lifetime income that lasts for either one or two lifetimes and guarantees a minimum number of years of payments, even if you (or both of you, if you've elected a Joint Life with Period Certain policy) were to die before the end of that period of time. You select the guaranteed payment period when you purchase your policy.
If you (or both of you, if you've elected a Joint Life with Period Certain policy) die before the guaranteed minimum payment period has elapsed, the remaining guaranteed payments will be made to your beneficiaries.6Single or Joint Life7 with Cash Refund:Pays a lifetime income that lasts for either one or two lifetimes and guarantees that you and your beneficiaries will receive income benefits totaling at least the amount you paid for your policy.
Period Certain Choices
|Incomes Lasting One Lifetime||Incomes Lasting Two Lifetimes|
|5, 10, 15, or 20 years||10 or 20 years|
If you (or both of you, if you've elected a Joint Life with Cash Refund policy) die prematurely, your beneficiaries are guaranteed to receive, in a lump sum, the difference between the premium you paid for your policy and the sum of the payments you received from the policy.8
Single or Joint Life with Percent of Premium Death Benefit:9 Pays a lifetime income for either one or two lives, and when you (or both of you, if you've elected a Joint Life with Percent of Premium Death Benefit policy) die, a percentage of your premium payment—either 25% or 50%, which you select when you purchase your policy—is paid to your beneficiaries in a single sum.
This alternative pays a lower income than one that does not provide payments to your beneficiaries, but it guarantees a legacy for your heirs. Furthermore, the amount your heirs receive will generally not be subject to taxes.10
Protect Yourself from the Effects of Inflation
You can also choose our Annual Increase Option.11 If you elect this option, your initial income will be lower, but your payments will increase each year by either 3% or 5% (whichever you select). This annual increase in your income will help neutralize the impact of inflation as your living expenses increase over time. This option must be elected at the time you purchase your policy.
Make the Most of Your Retirement Income Sources
The Changing Needs Option12 provides a one-time opportunity to either increase your income payments up to 5 times or reduce them to one-half your initial income payments anytime on or after the 3rd anniversary of the income start date. It is available only on non-qualified policies with a Single Life option, and the policyowner must be at least age 59½ at the time the income payments begin. The annuitant must be age 80 or younger to elect this option.
The Changing Needs Option can be a particularly effective tool in a retirement income strategy because it provides the opportunity to adjust your income to meet changing needs. For instance, it can be used to supplement your income during your early retirement years, which will allow you to delay the start of your Social Security payments. This strategy can allow you to receive higher monthly payments from Social Security at a later date. Or, if you anticipate a current income source expiring down the line (e.g., income from a current part-time job), you can plan to replace that income in the future.
Guarantee Your Lifetime Income and Benefit from Rising Interest Rates
The Income Enhancement Option13 enables you to "lock-in" guaranteed lifetime income with a Lifetime Income Annuity and still benefit from rising interest rates. It offers a one-time opportunity to potentially increase annuity income payments after the policy's fifth anniversary. If a benchmark index is at least 2% higher on the policy's fifth anniversary, annuity income will increase to reflect the higher interest rate.14 The increase amount is fixed when the policy is purchased, so the owner will know exactly when and by how much income may potentially increase.
Withdrawal Features To Help You Manage Unforeseen Circumstances
Although Lifetime Income Annuities generally do not provide access to money beyond the scheduled income payments, unexpected circumstances may lead you to need additional funds. That's why the Lifetime Income Annuity includes withdrawal features that provide you access to cash in an emergency.
Your policy offers two withdrawal features: Payment Acceleration15 is designed for short–term cash needs. This feature enables you to receive your next scheduled monthly payment, along with the five subsequent payments.for a total of six months of income payments paid to you all at once. When you exercise this option, your income payments will not be paid for the next five months. Also, the accelerated payments may be fully taxable.10 Once you are at least 59½ years old, you can use this feature twice during the life of your policy.
(Not all options are available on all contracts, in all states, or to annuitants of all ages. Ask your insurance professional for details.)
Significant Tax Advantages
An income annuity can also provide you with tax advantages, the nature of which depends on the type of money you use to purchase your policy:
Non-qualified annuities are purchased using after-tax dollars you may have accumulated in other savings vehicles. Each annuity income payment consists of a taxable income portion, and a return of premium portion, which is not taxable. The division between taxable and "tax-free" portions of the payment is determined by IRS rules based on several factors, including your life expectancy, the premium you paid for your policy (or other "cost basis"), and any guarantees chosen. Once the "tax-free" payments you receive equal your policy's "cost basis," all future payments you receive are 100% taxable as ordinary income.
Tax-qualified annuities are purchased using "pre-tax" dollars you may have accumulated in a 401(k), Keogh, Individual Retirement Account (IRA), or other pre-tax savings plan. Tax-qualified annuity payments are fully taxable as ordinary income in the year they are received. By rolling funds from a qualified plan into a Lifetime Income Annuity rather than taking a lump-sum distribution, however, you will spread your tax liability over many years, which may reduce your total tax liability.
An additional benefit gained from purchasing a Lifetime Income Annuity with tax-qualified money is that the income payments you receive automatically satisfy the Internal Revenue Service's requirement that you withdraw Required Minimum Distributions (RMDs) from accounts set up under certain tax-qualified plans. Your RMDs generally must be withdrawn each year after you reach age 70½, and severe penalties are imposed if you fail to withdraw the full RMD amount from your pre-tax plans and IRA policies. A Lifetime Income Annuity may help ensure that you satisfy IRS requirements.
If you choose a minimum guaranteed payment period, it cannot extend beyond your life expectancy, as specified in IRS Life Expectancy Tables, if you want the payments to satisfy your RMD requirements. Also, if you elect a Joint Life policy covering you and someone other than your spouse, there are additional restrictions that apply for your policy to satisfy RMD requirements. The Lifetime Income Annuity may allow you to take advantage of a number of tax benefits, but the tax treatment of annuity income payments is complex. Consult your professional tax advisor to understand fully how purchasing a Lifetime Income Annuity will impact your personal tax situation.
Perfect for Rollovers
Whatever you do in retirement, you may need to decide what to do with your 401(k), 403(b), 457, IRA, or other employer-sponsored retirement plans. You have several options, of course, including purchasing CDs, bonds, or stocks. Cashing out can be costly, especially if you're younger than age 59½. Rolling some, or all, of your retirement plan assets into a Lifetime Income Annuity can turn that money into a steady stream of income that you can enjoy throughout your retirement.
A Valuable Financial Tool
A Lifetime Income Annuity can be a useful financial tool to incorporate into any portfolio. The income from the annuity can be used to help support daily living expenses, subsidize your favorite hobby or charity, or even fund the purchase of other financial products.such as long-term care insurance or life insurance. In addition, knowing that your vital, basic expenses will always be covered.no matter how long you live.will enable you to prudently spend your other assets, especially because your need for discretionary income may decrease as you grow older and are less likely to be active.
A Lifetime Income Annuity can help give you the peace of mind to live the retirement you want and to maintain the quality of life you deserve, so that tomorrow can be as good as today.
New York Life The Company You Keep®
When you purchase a Lifetime Income Annuity to pay income benefits for the rest of your life, you want that annuity to be backed by a strong financial services leader, one that will still be thriving 20, 30, 40 years from now— and beyond. At New York Life, a lifetime guarantee made today offers a steady income tomorrow, to help you live the retirement you've worked for and deserve. That's a promise as good as gold.
Since 1845, New York Life Insurance Company, the parent company of New York Life Insurance and Annuity Corporation, has been providing quality insurance products to individuals, families, and businesses. Our financial strength is affirmed by the four major independent ratings agencies, which consistently award New York Life and New York Life Insurance and Annuity Corporation ratings that are among the highest.
For over 160 years, we have conducted our business around the central values of financial strength, integrity, and humanity, and we have remained committed to being a mutual company, owned solely by our policyholders. This means that, regardless of the economy, our focus is fixed on just one objective: meeting the needs of our customers, now and far into the future. When you purchase a Lifetime Income Annuity, you'll have the advantage of working with a New York Life agent. New York Life agents are among the most highly trained and knowledgeable in the business, and they add tremendous value by working closely with you to tailor solutions that meet your unique financial needs. Talk to your New York Life agent today and find out why we are The Company You Keep.®
2 This hypothetical example is used for illustrative purposes only. It assumes an initial premium of $100,000 and a 5.0% annual interest rate for Life Only Policy. Actual results will vary.
3 Income payments generally begin one "mode" after the policy date. If you choose to receive a monthly income, your payments will begin one month after the policy date, whereas if you choose to receive a quarterly income, payments will begin three months after the policy date. You may select a different start date for receiving payments, but payments must begin within one year of the policy issue date.
4Some features are not available on tax-qualified policies, and some are not available in all jurisdictions.
5 The income option you choose, as well as your age and gender, will affect the amount of each income payment, so be sure to discuss these factors with your insurance professional.
6 If your Joint Life with Period Certain policy includes a survivor income that is less than 100% of the income while both of you are alive, the reduction in income will not take place until the first annuitant's death or the end of the guaranteed minimum payment period, whichever is later.
7 The Life with Cash Refund option is not available on Joint Life plans where the survivor benefit is less than 100%.
8 If the total payments you receive prior to your death equal or exceed the initial premium you paid for your policy, then no further payments will be made to beneficiaries upon your death.
9 This income alternative is not available for tax-qualified policies, nor in New York or Washington.
10 Please consult with your professional tax advisor.
11This option may only be elected if the policyowner is at least age 59½ at the time of the first payment. The Annual Increase Option is not available with the Changing Needs Option .
12 The Changing Needs Option is available on neither tax-qualified policies, nor in all jurisdictions. The policyowner must elect one of the Single Life options. The Changing Needs Option must be elected at issue, and the exact date and percentage of the changing need must be determined at the time the policy is purchased. The one-time adjustment to income payments must occur prior to the annuitant's 91st birthday. The Changing Needs Option is not available with the annual increase option.
13 The Income Enhancement Option must be elected at the time of purchase. It is available only on non-qualified policies in approved jurisdictions. The owner of the policy must be at least 59 1/2 at the time of first payment, and the annuitant must be age 75 or younger at the time the policy is issued. If electing a joint policy, there may be no reduction of benefits. The Income Enhancement Option is available with neither Changing Needs Option nor the Annual Increase Option.
14The higher income benefit will be paid if the difference between the 10-Year Constant Maturity Treasury Index (CMT) rate in the third full week of the calendar month immediately preceding the policy date and the third full week of the calendar month immediately preceding the fifth policy anniversary is 2% or more. The higher income benefit would begin on the first scheduled payment after the fifth policy anniversary.
15 The Payment Acceleration feature is not available on tax-qualified policies.
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|Lifetime Income Annuity Product Details|