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Eight Ways Annuities Can Assist Your Growing Financial Needs

February 28, 2022

Annuities can be mysterious. You might even feel like they come with a hidden agenda, which could explain why you’re not too interested in adding them to your portfolio. But as we get closer to our 60’s and live longer, now might be the perfect time to revisit the financial strategies in your retirement plan. Consider these eight reasons annuities could impact your financial situation and then consult with your financial professional and tax advisor. 

  1. Social Security Maximization – Purchase an immediate annuity to provide current retirement income while delaying claiming Social Security retirement benefits to qualify and maximize the partially inflation-adjusted monthly Social Security benefit payment.
  1. Tax-Deferred Accumulation – Use a deferred annuity for tax-deferred accumulation. Annuity earnings aren’t taxed until withdrawals happen or the buyer starts taking regular distributions.
  1. Fund Essential Living Expenses – Purchase an income annuity or use the income options of a deferred annuity to help fund essential living expenses in retirement. This approach can free other assets for investing in potentially higher-yielding or inflation-offsetting asset classes.
  1. Create Protected Income From Accumulated Assets – Transfer funds from a 401(k) or other qualified retirement savings plan to an annuity product to utilize the annuitization or optional income riders to turn accumulated funds into a protected, guaranteed income stream.
  1. Create a Bucket Approach Using Retirement Funds – Purchase income annuities for the Income-Now Bucket, a deferred fixed or variable annuity for Income-Later Bucket, and a third bucket using the income options of a deferred fixed or variable annuity to satisfy required minimum distribution needs.
  1. Create a Lifetime Income Stream – Exchange the cash value of an unneeded permanent life insurance policy for an annuity product using a tax-free exchange.
  1. Supplement to Retirement Income – Use the annuitization and optional income riders of annuity products to create a protected flow of supplemental retirement income.
  1. Income Planning for Small Businesses – Use income options of a deferred annuity to create a lifetime income stream for small, qualified plans by making the annuity an investment of the qualified plan.

The financial advantages, guaranteed income, or living benefits of an annuity might be just what your portfolio needs. If you’re ready to review your retirement plan and consider making adjustments, give our financial professionals a call today.


This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results.  Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.

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