Lakewood Texas Insurance Agent Sam Morris discusses Income Annuities

Lakewood Insurance Agent Sam Morris continues his discussion on How Income Annuities Help Build A Personal Pension.

     Like a pension, annuities can help to protect clients against running out of money in retirement.  Clients can choose annuities that guarantee income payments no matter how long they live, or annuities that pay out for a specific period.  Another point to make:  Income annuities provide potentially higher payouts than individuals could withdraw on their own. 

Example:  A 65 year-year old man with $500,000 in savings and investments, using what many experts believe to be a safe withdrawal rate of 4%, would receive $20,000 annually before taxes.  But if the man allocates $165,000 of the $500,000 to an immediate income annuity, using the Annuity 2000 Mortality Table with a 4% interest rate assumption, the annuity would produce guaranteed income of $11,900.  If the man then withdraws from the remaining $335,000 at the 4% rate, this would provide an initial annual income of $13,400.

1. Ask yourself one thing.  Is this something that could help you get a leg up with fixed income annuities?

Longevity insurance, mentioned earlier, helps too.  A deferred fixed income annuity is used to protect against the risk of not knowing how long the client will live.  The client purchases the annuity when he or she retires, say at age 65, with the payments set to start later, maybe age 75 or 85.  This product acts as a catalyst to the whole LEG concept, because the investment is relatively small in comparison to that for other products, but it produces significant income at the older ages.  Finely having longevity insurance in place can shorten the planning horizon for using other retirement assets.  This can help provide a sense of well being.  For a free look at your retirement plan contact me for a free review of your assets and plans.

Lakewood Insurance Agent Sam Morris has been providing Annuity products, along with residential property coverage, auto insurance coverage, disability income coverage, and general liability coverage to clients in Garland and East Dallas since 2000. Sam is a veteran of the armed services and makes it his personal mission to make sure that you have the right coverage… not too much nor too little. Please call 972-240-8075 today for a personal consultation with Sam.