How To Get Lifetime Income

The challenge — how to maintain financial security and independence, even if your retirement may last three or four decades or longer? The need is for an income that will last a lifetime. What are your options?

Where you CANNOT count on receiving a guaranteed lifetime income:

• Stocks and mutual funds. These are subject to the uncertainties of market fluctuations. While the potential for strong growth may be high, there is also high risk, with no guarantees.
• Certificates of Deposit, Money Market Accounts, U.S. Savings Bonds and Savings Accounts. While these financial vehicles pretty much reduce risk of loss, returns are subject to change. In 1980, for example, taxable money market accounts were earning nearly 13 percent returns. If you are counting on a steady income, these choices have flaws. Additionally, no matter how much you accumulate in these vehicles, there are no guarantees that the money will not run out in the future because they do not tend to keep up with inflation. Although these products cannot guarantee a lifetime income, they may be suitable as part of an individual's overall portfolio to meet their retirement needs.
• Pension plans – both defined benefit and defined contribution. Many companies are phasing out (in some cases, abandoning) defined benefit plans. Defined contribution plans, on the other hand, may have the same risks as mutual funds and money market funds, which may be the funding media for these plans.
• Social Security. This government program is a political football that can be changed and adjusted by a simple act Congress, which has raised the retirement age several times in the past. Yes, benefits will most likely last a lifetime, but there are no guarantees full retirement benefits will still start and how much they will be.

Where you CAN count on receiving a guaranteed lifetime income: An annuity!¹ Annuities are unique financial vehicles, the only ones that can be arranged to provide an income that you cannot outlive. If you retire at age 65 and live to 105 or longer, your income payments will not expire.

That’s not all. Deferred annuities offer the opportunity for tax deferred growth. You are liable only for tax on your gain when it is distributed to you².

¹Guarantee is based on the claims paying ability of the issuing company.
²Withdrawals may be subject to surrender charges. In addition, if made prior to age 59^1/2, may be subject to a 10% IRS penalty.

Material discussed is meant for general illustration and/or informational purposes only. Please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional guidance.

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