Retirees face the crucial task of planning for retirement and ensuring they have enough money to cover their living expenses while protecting their savings from market volatility and unexpected expenses. Working with a financial advisor is critical in developing a successful retirement income strategy, and an annuity with a guaranteed income rider can be a valuable tool in that strategy, providing retirees with greater financial security to enrich their lives and enjoy their wealth.
An annuity with a guaranteed income rider provides a guaranteed income stream for life, allowing retirees to manage their retirement income more effectively. Funded by a lump sum payment, the optional add-on ensures a minimum level of income for the rest of the annuitant's life, allowing retirees to rely on a steady income stream regardless of market conditions or unexpected expenses. Financial advisors may recommend using an annuity with a guaranteed income rider for income now or income later, depending on the retiree's individual circumstances.
For example, suppose Jane has saved $500,000 for her retirement. She wants to ensure she has enough money to last throughout her retirement, which is expected to last for 25 years. Jane decides to purchase an annuity with a guaranteed income rider that pays her $25,000 per year for the rest of her life. With this annuity, Jane has a guaranteed income stream, regardless of market conditions or unexpected expenses, which allows her to rely on a steady income stream and use her remaining savings to pursue her passions and enjoy her retirement years.
In addition to financial security, an annuity with a guaranteed income rider can improve the Monte Carlo percentage. Monte Carlo analysis models different outcomes based on various assumptions and probabilities, providing retirees with a better understanding of the likelihood of running out of money during retirement. An annuity with a guaranteed income rider can increase the likelihood of having enough money to last throughout retirement, improving the Monte Carlo percentage and reducing the risk of running out of money.
In summary, working with a financial advisor and using an annuity with a guaranteed income rider can be a smart retirement income strategy. Retirees can rely on a steady income stream, improve the Monte Carlo percentage, and enjoy their retirement years with greater financial security and peace of mind. Financial advisors can help retirees determine the best time to use an annuity with a guaranteed income rider, based on their unique financial situation.
The information provided is general and educational in nature and should not be construed as personalized investment, tax, or insurance advice. You should consult with your own tax or insurance advisor regarding your personal situation. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, however Telemus Capital cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Insurance and investment decisions should always be made based on the client’s specific financial needs, goals and objectives, time horizon and risk tolerance. Current and future portfolio holdings are subject to risk. Risks may include interest-rate risk, market risk, inflation risk, deflation risk, currency risk, reinvestment risk, business risk, liquidity risk, financial risk and cybersecurity risk. These risks are more fully described in Telemus Capital’s Firm Brochure (Part 2A of Form ADV), which is available upon request. Telemus Capital does not guarantee the results of any investments. Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, and may lose value. Advisory and Insurance services are only offered to clients or prospective clients where Telemus Capital and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Telemus Capital unless a client service agreement is in place.