Since everyone’s retirement needs are different, we offer a wide variety of income annuities—each with its own unique set of benefits and features:
Lifetime Income Annuity—Provides a steady stream of income that’s guaranteed to last the rest of your life.
Fixed Period Income Annuity—Offers guaranteed income for a specific period of time.
Deferred Income Annuity—Allows you to receive higher income payments for life by delaying the start for a specific amount of time after you purchase the annuity.
If you pass away after your income payments equal or exceed the amount of money used to purchase the annuity, your contract will simply end. If you pass away before that time, your beneficiaries will receive the remaining money as a death benefit or refund.4
You do not have to pay income taxes on your annuity until you begin receiving payments. If you purchased the annuity with pretax funds, your income payments will be taxed as regular income. If you purchased the annuity with after-tax funds, you will pay taxes on the earnings, but not on the return of your premium.
In most cases, there are penalties for canceling your annuity contract early, so be sure to check with your agent before you do. There are some annuities that do not penalize you for early termination; however, you will receive only the amount of money that you paid into the policy (not the total value that you would receive in income payments), minus any payments you have already received.
You cannot lose money in the vast majority of annuities. The only potential exception to that rule is a variable annuity, which may decline in value due to market performance.
In some cases, you can exchange one for another, provided your life insurance policy accumulates cash value.
If you selected a joint life benefit, yes. If not, your spouse would be eligible to receive any undistributed principal, assuming that your spouse is your beneficiary. A New York Life financial professional can give you all the details.
As with most financial products, annuities are only bad if they do not meet the senior’s needs. In many cases, however, income annuities are a sound and effective way to help seniors make sure their assets last as long as needed.
The answer to that question depends on your needs, situation, and the type of annuity you purchase. For example: If you are in your working years and have plenty of money to get by, you may want to consider purchasing a deferred annuity as soon as possible. If, however, you need access to all your money now, you may want to wait and purchase an immediate annuity upon retirement. A New York Life financial professional can help you determine what’s best for you.
We’re here to help.
If you’re worried about running out of money in retirement, or just want to make sure you have enough income to lead the lifestyle you always imagined, annuities can be a helpful and reassuring part of your retirement plans. If you have more questions or would like to see how much income an annuity can generate for you, please contact a New York Life agent.
New Your Life annuities are issued by New York Life Insurance and Annuity Corporation (a Delaware Corporation), a wholly owned subsidiary of New York Life Insurance Company. For most jurisdictions, the policy form number for the New York Life Guaranteed Lifetime Income Annuity is ICC11-P102; it may be 211-P102 and state variations may apply.
1 The exception being guaranteed acceptance life insurance products.
2 American College of Financial Services, “Focus on Retirement Happiness to make the Annuity Case,” October 28, 2020.
3 Monthly income is based on rates as of 3/7/22 for a New York Life Guaranteed Income Annuity (male, age 65, Life with Cash Refund Payout Option) with a $100,000 premium payment. Rates are subject to change.
4 The annual payout rate includes a return of premium and other factors and is not an interest rate.
5 The availability of these options are based on the annuity you purchase and/or the features you select.