MYGA Fixed Rate Annuities
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3 YR 
5.00%
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4.80%
6 YR 
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4.85%
10 YR

Lifetime Income Annuity Choices

lifetime-income-annuity-choices

Today we're talking about lifetime income choices using annuities. Now, here's the great part about it. You're already a member of the annuity income family. You're already a member and a participant in lifetime and retirement income insurance. You already own the best inflation annuity on the planet called Social Security.

All right. So we've established that you're already an annuity owner. I'm glad that you're in the family. That is fantastic. But let's talk about the four annuity types that provide lifetime income. But let's go backward in time. A little history lesson for all of you wondering where annuities started. Back in Roman times, the dutiful Roman soldiers and their families laid it on the line for the empire. And what did the empire do as good empires do? They said, "You know what, Roman soldiers and families? We're going to create an annual pension payment." A-N-N-U-A. The root word for an annuity. Hello. A-N-N-U-A is a pension payment for you and your family for the rest of your life.

Annuities are the only product and category that provide a lifetime income stream, as long as you breathe. If you lived to 130, it's going to pay. t's a transfer of risk for the annuity company to pay for the rest of your life. And you can set it up as joint life or single life.

Everything comes down to income now and income later. So you either need income to start right now or income to start later. It's really about Single Premium Immediate Annuities. That's the original annuity type that's very eerily similar to the ones in Roman times. It's to transfer a risk based on your life expectancy. How about lifetime income insurance? How about retirement income insurance? You already have that with Social Security. You might need more with these types of annuities. And remember lifetime income. The annuity is the only product that can do that as a part of your overall income.

So whether it's immediate annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and lifetime income riders, they're all retirement income insurance. They're all lifetime income insurance and will pay regardless of how long you live.

But at the end of the day, everyone needs that income floor. What's that income floor? The monthly amount hits your bank account every month, regardless of who's in the office and what's happening worldwide. If Israel's at war, it doesn't matter. It's hitting your account, and you're living your lifestyle and the lifestyle that you've earned, saved, scrimped, and laid the line to get. That's what your income floor is. And annuities can fill in that gap. So lifetime income now, Single Premium Immediate Annuities. That's the easiest to understand.

Easiest to understand the choice for lifetime income is to transfer risk. Income starts as soon as 30 days, and it's late as one year. Once your pass one year, there are three other choices. There are Deferred Income Annuities, Qualified Longevity Annuity Contracts, and income riders attached to index annuities. You can also attach to variable annuities. We don't sell variable annuities because we don't sell anything that has the potential to go down. The income riders attached to index annuities historically have higher contractual guaranteed income amounts if you quote them side by side. That doesn't make them better. It just is what it is. And I live in a world of contractual guarantees where you own an annuity for what it will do, not what it might do.

So let's talk about the income later side. Income now is immediate annuities. Income later, Deferred Income Annuity, which is an immediate annuity structure. But once you go past 12 to 13 months, it turns into a Deferred Income Annuity. It's the same structure. No annual fees, no moving parts, no market attachments. It's a straight transfer risk based on your life expectancy at the time you take the payment. And by the way, all of these types of annuities. Life expectancy at the time you take the payment drives the train. Interests play a secondary role.

You're not the master of the universe. And there's no way to time it. So Deferred Income Annuities are immediate annuities. And then Qualified Longevity Annuity Contracts that you can only use in your traditional IRA or specific qualified accounts. By the way, that's A DIA. So a DIA's an SPIA. A QLAC's a DIA. Confused? I hope not, because I have books on that. But the Qualified Longevity Annuity Contract is the newest lifetime income product on the planet. Developed, designed, and introduced in 2014 by our friends at the IRS and our friends at the Department of the Treasury. They're encouraging you, nudging you, tapping you on the shoulder to use your qualified and retirement assets. Some 401ks have them. But most people who buy them in traditional IRAs want you to use that money for future income. And it can start as late as age 85.

So you got immediate annuities, Deferred Income Annuities, and QLACs pretty much the same structure, with a couple of different rules. And then, the last one's income riders. Income riders, I like, because they're flexible. They can be attached to an index annuity or variable annuity at the time of application. But we only look at the income rider guarantee when we run quotes. We don't look at the index annuity return possibility scenario, hopeful, projected, back tested, unicorns chasing the butterfly.

Index annuities were put on the planet to compete with CDs in 1995. And that's what they do. But how we use them primarily, they're efficient and cost-effective delivery systems for the income rider guarantee. So just visually, draw a line down a blank sheet of paper. The index side is over here. The income rider side is over here. We're running the quotes only focused on the income rider. That's what I'm looking at because the income rider is the guarantee for a lifetime income. It's a flexible product, meaning you can turn on the income in year seven, shut it back off, and then turn it back on in year 11. It's fantastic.

You don't even have to turn it on at all. You could get to the end of the index annuity surrender charge time period and say, "You know what? Plans have changed. We're not going to use the income rider. Send me all the money back with interest, whatever the index annuity gain." We can do that. I mean, whatever the choice is, whether it's income now or later, I'm going to shop all carriers for the highest contractual guarantee.

Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.


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