Generating Income In Retirement

April 25, 2013 - PRLog -- One of the biggest challenges you may face with developing a financial strategy is the uncertainty of how long to provide income in retirement. Laddering annuities is a strategy that can help you create separate legs of retirement income.

Annuity laddering basically divides assets among a series of annuities designed to deliver income over specific blocks of time. This strategy helps remove some of the guesswork of retirement income planning by giving you specific timelines for both the accumulation period and the distribution phase. For example, the first leg of retirement may be covered by the bulk of your immediate annuity assets with a distribution strategy that spans a “period certain” of, say, twenty years.

When this period is about to end, the second leg of your retirement strategy would kick in by annuitizing the deferred annuity. One particular benefit is the potential for higher income generated from a lesser premium, since this portion of your assets would be accumulating interest over the same 20-year period without any distributions. And, without jeopardizing the income you receive from the first leg of your retirement income strategy.*

Rather than committing a lump sum to one annuity, utilizing different types of annuities may enable you to accumulate more retirement savings over time to ensure income in later years. Laddering can help offset the impact of interest rate and market fluctuation in the early years of retirement, and possibly provide an extra boost of income in later years when you may have increased medical or assisted living expenses.

Please contact me to develop or update your current retirement income strategy. We can discuss if annuity laddering would be an appropriate strategy to help ensure you receive income for the rest of your lifetime – as well as your spouse’s. I look forward to speaking with you soon.

P.S. A Fixed Indexed Annuity is a great idea for the longer-term leg of annuity laddering. Because it is linked to an equity market index, you receive limited interest-crediting potential to help build your income payout over a long timeframe without risking principal to market decline.

Annuities are designed to meet the long term needs for retirement income.  They provide guarantees against the loss of principal and credited interest due to market decline, and the reassurance of a death benefit for beneficiaries.  Contract owners have a variety of income options, including lifetime payments.

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