Guaranteed Income for Worry-Free Retirement with Annuities
Planning for retirement means ensuring you’ll never run out of income, no matter how long you live. Annuities provide a reliable solution by turning your savings into predictable income streams that offer peace of mind throughout your golden years.
What Are Annuities?
An annuity is a financial product offered by insurance companies that provides guaranteed payments over a set period or for life. Annuities are particularly popular for retirees seeking financial stability and protection from market volatility.
Sequence of Returns Risk and Retirement Distribution
One of the most critical aspects of retirement planning is managing the risk of negative returns early in retirement. This is called "sequence of returns risk." If you begin withdrawing funds from your retirement accounts during a market downturn, your portfolio may not have enough time to recover before you exhaust your assets. Annuities, especially those funded with Roth dollars, can help protect against this risk by providing a steady income stream regardless of market conditions. This stability can help preserve the rest of your portfolio for long-term growth.
Types of Annuities
Fixed Annuities
Provide a guaranteed rate of return, making them predictable and low-risk.
Indexed Annuities
Link earnings to a market index, offering growth potential with principal protection.
Key Benefits of Annuities
Guaranteed Lifetime Income
Annuities ensure you’ll never outlive your income, providing financial stability.
Tax-Deferred Growth
Your investment grows tax-deferred until you start receiving payments, maximizing compounding.
Customizable Payment Options
Choose between lifetime income, spousal benefits, or fixed-period payouts to fit your needs.
Protection from Market Downturns
Indexed annuities shield your principal from market losses while allowing for growth.
Roth Dollars and Their Role in Retirement
When planning for retirement, it’s important to consider the type of money you’re using. Roth dollars—funds placed in Roth IRAs or Roth 401(k)s—offer some unique advantages:
Tax-Free Growth
Roth dollars grow tax-free, meaning the earnings in your Roth accounts aren’t subject to taxes, unlike traditional retirement accounts. This provides the opportunity for substantial tax savings during retirement.Tax-Free Withdrawals
Since Roth contributions are made with after-tax dollars, withdrawals in retirement are tax-free, which can be a huge benefit in managing your tax situation as you age.No Required Minimum Distributions (RMDs)
Unlike traditional retirement accounts, Roth accounts do not require RMDs starting at age 73. This allows you to have more control over your withdrawals and can help preserve your wealth for a longer time.Legacy Benefits
Roth dollars can be passed on to your heirs tax-free, offering an efficient way to leave a tax-advantaged legacy.
How Annuities Work
Purchase: You invest a lump sum, roll over and 1035 exchange from other retirement accounts, or make periodic payments to the insurance company.
Growth: Your investment grows over time, tax-deferred depending on the classification of your dollar.
Payouts: At retirement, you receive guaranteed payments based on the type of annuity and payout structure you’ve chosen or distribute off your asset in growth annuities.
Secure Your Retirement with Confidence
Annuities offer the peace of mind that comes with knowing your income is guaranteed. Whether you’re nearing retirement or planning ahead, an annuity can provide the financial stability you need to enjoy your golden years worry-free. And by incorporating Roth dollars into your strategy, you can benefit from tax-free growth, tax-free withdrawals, and no RMDs—maximizing your financial security and helping ensure your legacy is protected.
