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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Supplement to Retirement Income – Use the annuitization and optional income riders of annuity products to create a protected flow of supplemental retirement income.
- 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 at (540) 720-5656.
Adapted from Think Advisor1
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Chase Lopez joined the ILG Financial team in 2020 as an advisor. Chase is a 2016 James Madison University graduate with a degree in management. Chase has been trained under the tutelage of Dave Lopez, who is not only the founder and managing member of ILG Financial, but also is Chase’s uncle and godfather. He also enjoys working alongside his cousin, Megan, who is Dave’s daughter. Chase, as a fiduciary, believes in putting his clients interests first, and building out plans for his clients where they can have a happy and fruitful retirement. He married his beautiful wife in February 2022 and both use most of their free time chasing around their little pup, Aurora.
Jessica Carson joined the ILG Financial team in 2018 as an agent. Jessica and her husband have four children, two dogs, 3 barn cats, 5 chickens, and three parakeets. She indeed loves her children and pets! When not at work, Jessica enjoys playing the piano and cello as well as traveling and spending time outside with her family, hiking, fishing, and boating.
Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.