These days pensions have become a thing of the past. For most retirees they need to carefully plan out their income, so they don't outlive their resources. Times like this, with all the market volatility, it creates a real concern for many retirees. This is the time in which people tend to second guess their investment decisions. Having to sell assets at a loss to support your ongoing living needs could potentially decimate a portfolio. If you're like most retirees, Social Security is the only guaranteed income source that you have.
Well, there are solutions available to provide lifetime income without having to sacrifice your investments. Many of the annuities today offer lifetime income riders that may provide lifetime income even if you deplete the account.
I think where this makes the most sense is once you can identify your basic living expenses in retirement such as housing, food, transportation, etc. Then, you can compare how much Social Security will pay for. The difference between the two could be filled utilizing an annuity with a lifetime income rider.
Most annuities today are deferred which means they do not annuitize the contract, giving up control of the asset or the investment. These riders are simply like an insurance policy on your income. Unlike the traditional annuity, if you were to pass away, your beneficiaries would receive whatever money is left in the account.
Of course, not all annuities are the same. There are fees and costs associated with annuities and the additional riders, along with possible surrender charges. But if you like the concept of providing a basic income you cannot outlive, give us a call to discuss.