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Guaranteed Lifetime Income: A Promise as Good as Gold

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 Annuity products—to help you enjoy peace of mind in your retirement, knowing that your retirement income will last for as long as you live. That's the promise we make to you: retirement income that lasts. It's a promise as good as gold.

The New Face of Retirement

In the past, retirees typically relied on their employers to provide pensions during retirement. Along with Social Security and personal savings, employer-sponsored defined benefit plans helped ensure retirees a decent quality of life during a retirement that was expected to last between ten and twenty years.1

How different the landscape of retirement looks today.

If you are like many Americans, you may not have access to a traditional pension plan—the type your parents likely received when they retired. Even if you are among the lucky few vested in a traditional company pension, many companies are reducing benefits. And if you have been a stay-at-home spouse or were self-employed, you may not have access to a company retirement plan of any kind.

What about Social Security? We are all aware of the uncertainty surrounding the future of Social Security. Within less than two decades, there could be more retirees receiving payments than there could be workers contributing to the system. In fact, annual outlays for Social Security are projected to exceed revenues beginning in 2019.2 And then there's the reality of inflation— which averaged 3.5% since 19163—along with the always-rising costs of health care.

Will You Have the Income You Need To Enjoy Your Retirement Fully?

In addition, Americans are living longer, healthier lives. Thanks to medical advances and healthier lifestyles, life expectancy in the United States has risen by 30 years over the last century4—and continues to rise. In fact, a healthy 65-year-old male today has a 50% chance of reaching age 85, and a 25% chance of reaching age 91. A healthy 65-year-old female has a 50% chance of reaching age 88, and a 25% chance of living to at least age 93.5

Living longer and healthier lives means that many people today will be spending a lot of time in retirement, perhaps even 20 or 30 years. And rather than retirement being a time to "slow down," today's retirees are finding that it is a gloriously active "third act" of life, a time to harvest the fruits of their life's work and live the dreams they've been building toward during their working years.

The result? Now that people are more actively enjoying their retirement, there are fewer sources of guaranteed income that can be relied on to support those retirement lifestyles. That's where New York Life and New York Life Insurance and Annuity Corporation come in with Guaranteed Lifetime Income products and a promise as good as gold.

The Promise of Lifetime Income Still Exists

Hopefully, you've had the opportunity to save money toward retirement and grow a comfortable nest egg to help ensure yourself a rich and rewarding life in retirement. But, like many, you may be hesitant to spend down your nest egg, because you do not know for how long you'll need that money to last. With fewer and fewer guarantees, you want to know that your income sources will last as long as you do.

Our Guaranteed Lifetime Income products provide that assurance. By promising to pay you a stream of income for as long as you live—no matter how long that is— these annuities help ensure that the fruits of your financial efforts will continue to sustain you throughout your retirement. Only a life insurance company can promise you guaranteed lifetime income.

A Better Approach With a 100% Guarantee

Our Guaranteed Lifetime Income products are income annuities that provide a 100% guarantee that your retirement income will last as long as you live, no matter how long that is and no matter how the financial markets perform.

If you are a 65-year-old male and are planning on spending down your nest egg, you could withdraw approximately 4% a year if you wanted your portfolio to last around 30 years—and there's only about a 90% probability that your nest egg will last that long.6 While payout rates vary based on age, gender, interest rates, and other factors, our Guaranteed Lifetime Income products typically offer a 5%-6% payment rate based on payments that include an annual 3% inflation adjustment—a payout rate that is 25%-50% higher than the 4% you would receive spending down your nest egg.7 And because our payments come with a 100% guarantee to last for the rest of your life, it makes good financial sense to include Guaranteed Lifetime Income products in your retirement income portfolio.

Some of our Guaranteed Lifetime Income products offer innovative features such as inflation protection, emergency access to your money, and legacy options.8 We also have customizable solutions designed for retirees, as well as for people still in their working years.

Live as Well Tomorrow, With a Guaranteed Lifetime Income Stream

Not only can guaranteed lifetime income help provide peace of mind in retirement, it also can help you optimize your income in retirement and plan the best use of your assets, so that you can live well.

For instance, by purchasing a Guaranteed Lifetime Income product, you can help ensure that certain expenses will always be covered. You can earmark this lifetime income to cover rent, medical bills, insurance costs, trips to visit family—in short, anything that you know will be a regular expense for the rest of your life.

By knowing that guaranteed lifetime income will cover your regular expenses, no matter how long you live, you can spend other assets with confidence. You can also invest your other assets more aggressively, if you wish. And because your need for discretionary income may decrease as you grow older and are less likely to be active,9 you can use those assets to more fully enjoy the more active early years of retirement.

That's why whether you are already retired or are approaching retirement, you should think about the emotional and economic benefits that Guaranteed Lifetime Income products can have on your retirement.

Where a Promise Is a Promise

Only a life insurance company can sell an income annuity, and there is no better company from which to purchase an income annuity than New York Life Insurance and Annuity Corporation.

An income annuity is only as good as the company that stands behind it. New York Life Insurance Company and New York Life Insurance and Annuity Corporation have among the highest ratings in the industry from Fitch, Moody's, A.M. Best, and Standard & Poor's.10 That's because New York Life Insurance Company has been keeping the promises we make to our customers for over 160 years.

New York Life Insurance Company is built on the cornerstones of financial strength, integrity, humanity, and mutuality. Together, the first three cornerstones grant us the reputation of being a company you can count on, in good times and bad. The last cornerstone, mutuality, means that you'll be able to count on us for generations to come. As a mutual company, rather than a publicly held company, we operate in the best long–term interests of our policyholders, not in the short–term interests of Wall Street. Being a mutual company owned by our policyholders also ensures that we can't be bought, so you can rest assured knowing that the company you purchase a policy from today will be the company you continue to work with always.

In addition, when you purchase a Guaranteed Lifetime Income product, 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.

Retirement That Lasts, From The Company You Keep®

At New York Life, we believe that retirement should be supported by the promise of guaranteed lifetime income. When is guaranteed lifetime income truly guaranteed? When it is promised by a company whose enduring values are financial strength, integrity, humanity, and mutuality. 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.

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1 http://ideas.repec.org/p/wop/chicpw/0013.html

2Congressional Budget Office, 2005.

3 Public Misperceptions About Retirement Security, LIMRA International, Inc., 2005.

4http://www.aarp.org/research/international/speeches/a2003-07-11-international-progressiveconf.html.

5Source: Annuity 2000 Mortality Tables.

6 Source: New York Life Investment Management. A hypothetical untaxed portfolio of 50% equity and 50% fixed income would last 27.5 years at an 89.5% confidence level, if withdrawals were taken at an inflation adjusted 4% a year. The historical annual date, from 1926 trough 2005, is from Ibbotson Associates. Equity returns were modeled using the S&P 500. Fixed income returns were modeled using the Ibbotson Long-Term Corporate Bond Index. Inflation readings were taken from Ibbotson inflation data. The confidence level was derived by taking a Monte Carlo simulation of 10,000 trials with random returns drawn monthly from the Ibbotson data. The model assumed an annual fee of 125 basis points.

7 The estimated payout rate above is based upon a male aged 65 and includes an inflation adjustment to the payout of 3% a year. Payout rates are based on annual payments that include principal and interest.

8 Some features are not available on tax-qualified policies, and some are not available in all jurisdictions. Certain limitations and exceptions may apply.

9 Source: U.S. Department of Labor, Bureau of Labor Statistics, Consumer Expenditure Survey, 2002.

10 A.M. Best: A++ (Superior); Standard & Poor's: AA+ (Very Strong); Moody's: Aaa (Exceptional); Fitch: AAA (Exceptionally Strong). Source: Rating Agency Reports issued on or before December 20, 2005.

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Guaranteed Lifetime Income: A Promise as Good as Gold

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