Increasing Income In Retirement

Increasing Income In Retirement

October 17, 2017


With so many annuities out there it’s hard for an individual to know which one is right for them. If you’re looking for something with NO RISK to the principal but still linked to an index that historically outperforms inflation then a fixed indexed (FIA) annuity may be right for you.

So let’s narrow it down to a specific age range between 40-60 years old. If you fit this profile then you will find the following example interesting. There is FIA issued by an A+ insurance company that pays a 15% bonus upfront added to your protected income account value on all premium added in the contract in the first year.  

Plus an interest bonus equal to 50% of any interest you earn from your chosen index allocations will be added to your protected income account value on each anniversary date. This annuity is one of the few where the income once turned on can increase as credits are added to the contract value as the index moves up so then the income increase is locked in.

Most FIA’s have a fixed income once started. The advantage of having an increasing income once started helps to fight against inflation over a long period of time.

Let’s take a look at an example of a 50-year-old male using 250k as the initial premium paid into this annuity using actual returns based on one of the indexes available in this contract.

Male age 50

250k initial premium  

Income starts at age 65

First-year income $27,948.00 (will never be less)

Second-year income moved up to $29,416.00 (will never be less) and is locked in. Your income will continue to move up in good years.

In a bad year, the income would just stay the same as the previous year.

By the time you reach age 80 in this example your income has increased to $54,347.00 a year for a total of $645,941.00 in income payment’s and still continues to move up based on increases in the index for life. You can also choose joint life payout covering two lives. (This is an example based on past performance of the last 10 years)

Contact my office for a free illustration based on your age and objective.