You may be wondering about the various annuity benefits and how they may help you in your retirement years. If you’re looking for a way to avoid outliving your income, enjoy some tax benefits as you invest without risk, and still be able to provide an inheritance if you die prematurely, an annuity may be for you. Here are some annuity advantages.
Tax Benefits
You may already be investing in a 401(k)or an IRA but those have annual investment limits. Those limits mean your future income may also be limited. With an annuity, you can invest as little or as much as you want, tax deferred. That means the interest compounds without you having to pay taxes every year on the proceeds. You only pay taxes on the amount you take each year after retirement which often means you’re earning less and in a lower tax bracket. The annuity benefits you while you’re investing and once you start taking the distributions.
Consistent Stream of Income
Although some people choose to take a lum psum distribution for their annuity once during retirement, it is more common to establish a monthly payout. For individuals with a 401(k), IRA,Social Security, pension or some combination, this additional income can bring them to a level they enjoyed prior to retirement. When you set up your annuity, you can choose how many years you would like distributions.
It Compliments Your Savings
Your 401(k)and IRA are just two types of savings accounts. You may also have savings elsewhere.Useless of your savings each month through the use of an annuity, helping your income remain steady for longer. If your fear is that you’re going to outlive your savings, you can choose a guaranteed life income rider on your annuity so you can’t outlive it.
Annuities areProtected
Although it’s not protected by the FDIC like a traditional savings or money market account, in Florida, they are guaranteed to $250,000. You can have multiple annuities to maximize the annuity benefits and enjoy the lifestyle you’ve come to enjoy.
The Advantage Group can help you choose the best options for your retirement. We’re based inClearwater, Florida and offer many retirement and employee benefits programs. Call us today at (727)796-9660 to schedule an appointment for a free consultation.
