Summer Savings: Seven Ways to Do More With an Income Annuity

Jun 16, 2021

By Dan Schulte, Senior Vice President and Manager, Annuities and Insurance

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Income annuities can be a great way to provide guaranteed income for a period certain, or even for a lifetime. What may not be as well-known are the strategies that can utilize various income annuity designs. Below are samples of various income annuity techniques:

  1. Retire sooner – If your goal retirement date depends on when you have enough money saved, consider a guaranteed lifetime payout. If legacy isn’t a concern, you can meet your income goal sooner than using interest from retirement assets for income. However, the downside is the lack of liquidity, and legacy potential should also be considered.
  2. Leave a Legacy – By opening a joint life policy, a policy owner could structure the contract to receive lifetime income for themselves, their child, and their grandchild to create a multi-generational income stream.
  3. Maximize Social Security Income – A period certain annuity can provide the necessary level of income now, allowing you to defer Social Security benefits to the maximum age. The longer you defer social security, the higher the income.
  4. Turn Cash into Retirement Income – If you have cash on the sidelines and would like to secure guaranteed income now, consider an income annuity to turn it into a stream of guaranteed lifetime income, or use it as a way to provide a legacy.
  5. Supplement Long-term Care Costs – If an individual is uninsurable, a guaranteed stream of income from an income annuity may be a way to provide for long term care costs. This can help relieve concerns about unknown future long-term care events.
  6. Fund Life Insurance – Purchase an income annuity and use the after-tax income payments to pay the premiums on a life insurance policy. Life insurance provide income tax-free death benefit leverage for those who can qualify medically.
  7. Diversify Income Sources – In addition to other income sources – like traditional equity income and fixed income options – an income annuity can help create a sustainable income stream, meaning a stream of income policy owners can never exhaust.

Contact your financial advisor for additional information regarding income annuity planning options.


Note: All annuity guarantees subject to the claims paying ability of the issuing carrier.