How a Guaranteed Income Annuity Can Work for You

Guaranteed Income Annuity

A popular financial strategy for higher-income families is the guaranteed income annuity because of the peace of mind it can offer.

No matter how much money you have in the bank or what your investment portfolio looks like today, you have to put considerable thought into financial planning for retirement. Even if you never want to retire because you enjoy working or building new businesses, there will come a time when you will slow down and take a closer look at your financial assets. If you partner with Rebo Wealth Services now, you will get to that point with a sense of security and satisfaction rather than anxiety.

What are Guaranteed Income Annuities?

Annuities are policies that allow you turn a lump sum investment into routine payouts. When payouts are guaranteed, it means that you will continue to receive the expected payments regardless of economic downturns and other factors. This provides added security that you don’t get when investing your money in stocks or bonds.

The only thing that could stop your payments from paying out as expected is the bankruptcy of the financial firm managing the annuity. While this is quite rare, it is something to consider when determining how much of your money to invest with any single firm. You can invest in multiple annuities backed by different financial institutions, so talk with one of our experienced wealth strategists before selecting your annuity policies.

Types of Guaranteed Income Annuities

There are different types of annuities that will deliver payouts at specific periods of retirement. For instance, immediate annuities start paying out right away and can serve as a predictable stream of income from the first day of retirement to the day that you pass away. Some policies will even continue payments to your beneficiaries for a given period of time if you pass away earlier than expected.

If you’re more concerned about running out of money before you pass, then you may consider deferred-payment annuities instead. These policies require an upfront investment, but you won’t receive payouts until you reach a specified age. This allows your investment to mature before you receive the money back, so you typically have to invest less in this type of annuity to receive adequate payouts later in life.

Multiple Annuities or No Annuities – What’s Right for You?

A guaranteed income annuity is attractive because they will pay out for your lifetime, reducing the risk that you will run out of money even if you do enjoy a lavish retirement lifestyle. For someone accustomed to living with daily luxuries, investment in annuities could make the difference between living as expected and making severe cuts to your expenses in the years to come. When so much of your investment portfolio can fluctuate depending on factors outside of your control, a guaranteed stream of income brings peace of mind.

The downside of a guaranteed income annuity is that you could lose much of your initial investment if you pass away earlier than expected and your policy doesn’t continue payments or disperse the remaining funds to your beneficiaries. You also lose the ability to withdraw your money for emergencies when you invest in an annuity. This isn’t a reason to avoid annuity investment. It just means that you need to work closely with Rebo Wealth Services to select the right annuities for your retirement needs.

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