Your Financial Future:
Annuities And Lifetime Income
What's Your Best Way to Take Money Out?
Making your money last a lifetime is no simple undertaking. But with the proper organization and professional help, you can make it work.
So what are your options for receiving your retirement money? Aside from Social Security, for which your only decision is when to receive a monthly payment for life, your other retirement assets typically come with decisions on when and how to receive them. You can lock in a regular monthly payment for life, or take a lump sum to manage on your own, or use some combination of these two methods.
Guaranteed Payments for Life
You will receive regular payments for life from Social Security, and you could receive a similar type of benefit from other plans. A stream of regular monthly payments for life comes from a product known as an annuity. Depending on the type of annuity, your spouse could also continue to receive payments following your death, at least for a certain period of time.
Purchasing Income Annuities on Your Own
You can buy an annuity with funds you receive from a defined contribution retirement plan, an IRA, savings, or any other source. The amount of income you will receive from an annuity is based on the amount you pay the insurance company, the income option you choose, current interest rates, your gender, and your age at the time you purchase it.
Some advisors suggest that you buy an annuity after you retire, between about ages 70 and 80, if your prospects for a long life are still good. As you get older, the rates will be more attractive and there will be less risk to you of future inflation. Another option is to buy multiple annuities at different times, to allow you to spread out both interest rate risk and the payment of income taxes.
To learn more about annuities, read WISER's booklet Making Your Money Last For A Lifetime, Why You Need to Know About Annuities.
Lifetime Income Calculator is donated as an educational tool from Hueler Investment Services, Inc. and is powered by Income Solutions® which is a registered trademark of Hueler Investment Services, Inc. and used under license. United States Patent No. 7,653,560.
- "Your Future Paycheck" Calculator
- Annuity Shopping Tips
- Making Your Money Last for a Lifetime: Why You Need to Know About Annuities
- Making Your Money Last Through Your Retirement - Immediate Annuities
- Retirement Plans
- Types of Annuities
- Variable Deferred Annuities: One Size Does Not Fit All