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Annuities Q&A

What are annuities?
Annuities are financial instruments that earn interest and can provide a guaranteed income source for a specified time.

How are annuities taxed?
Generally, when you receive payments from a qualified annuity, payments will be fully taxable as income. However, given certain requirements, when annuities are purchased with a Roth IRA or Roth 401(k), they can be tax-free.

How do annuities work?
Annuities can provide a guaranteed source of income for life. They are an excellent way to provide yourself with retirement income. In certain situations, annuities can be a beneficial addition to your portfolio. If you have questions on annuities, get in touch with McLoughlin Financial!

When it comes to retirement planning, much of the American workforce is concerned with guaranteed money, dispersed monthly, that will cover their living expenses in retirement. How much income does an individual need at retirement, anyway? Retirement planning is more involved than simply saving a bunch of money. It is important to consider specifics such as expenses, spending, and potential income sources. No one number works for everyone, but many experts suggest planning to aim for a goal of 80% of your current income when you retire. One income source might be social security benefits. However, it is nearly impossible to fund retirement income needs with social security benefits alone. You deserve to have the life you desire at retirement.

Lifetime Annuity

An annuity can help cover essentials to living in retirement. Many Americans utilize a lifetime annuity to help their retirement savings grow and create protected, guaranteed income they can use to cover regular expenses and contribute to having a more enjoyable experience in retirement. An annuity is essentially a contract between an individual and a life insurance company. Annuities can be purchased with part of the individual’s retirement savings with a single payment or multiple payments over time. Depending on the type of annuity, of course. When you own an annuity, growth in your account is usually tax-deferred. Annuities are a solid component of a diversified retirement portfolio since they ensure your retirement income remains protected even when the market falls. Regardless of how other investments perform, annuities provide a source of protected lifetime income that cannot be provided by many other financial products.

Guaranteed Lifetime Income Annuity

Certain kinds of annuities offer individuals the flexibility to get guaranteed lifetime income and still allow the owner to access their funds in the form of a guaranteed lifetime income annuity. When the individual is ready to take their income, they can choose to receive payments in various ways. This depends on the type of annuity purchased and the individual’s income needs. Individuals can choose to receive income immediately when they purchase an immediate lifetime annuity or at a future date. Payments can be received in a series of payments for a specified period. What is most attractive for many Americans is the option to receive guaranteed payments for as long as the individual is alive. This comes with an annuity called a guaranteed lifetime income annuity. There are so many types of annuities. Other types of annuities include immediate lifetime annuity, lifetime payout annuity, guaranteed life annuity, and lifetime fixed annuity. Depending on what your individual needs are and how you would prefer to receive your payments, you may find one kind of annuity option more attractive than another.

Immediate Lifetime Annuity

An immediate lifetime annuity is an investment that turns current retirement savings into future income. With an immediate lifetime annuity, you will receive a set of guaranteed income payments at specified intervals for a set number of years during retirement. With the many different types of annuities, at different rates, and payouts, there is no one plan that will work the same for every individual. Your retirement income needs are unique to you. We work with individuals, families, and businesses to guarantee your retirement income needs are met.

Key Takeaways

No matter what your goals and dreams are for retirement, one thing is certain: social security benefits alone cannot fund your retirement income needs. To ensure your retirement income needs are met, meet with an insurance professional to discuss a guaranteed lifetime income annuity or an immediate lifetime annuity. We want to ensure that you get to live your best life at retirement. With annuities, your retirement goals and dreams are possible. No longer do you have to worry about other investments underperforming your goals.

Insurance and annuities are products of the insurance industry. Guarantees are subject to the claims-paying ability of the insurance company and surrender charges may apply if money is withdrawn before the end of the contract.

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