Whether you are still building your retirement savings or transitioning from wealth accumulation to generating retirement income, it’s essential to plan for the lifestyle you want and understand how to fund it. At BL Financial Services, we focus on creating a structured retirement income strategy tailored to your individual goals and priorities.
We help you clarify your retirement income objectives and set clear priorities, separating essential living expenses from aspirational or lifestyle goals. By aligning your income sources and retirement savings with these priorities, we can increase the likelihood of meeting your goals and ensure your retirement funds last throughout your lifetime.
The Role of Annuities in Your Retirement Portfolio
An annuity is a contract with an insurance company that provides an income stream or lump sum at a future date. When used in a retirement portfolio, annuities can offer:
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Lifetime Income
Annuities can provide a reliable income stream designed to help cover essential living expenses throughout retirement.
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Downside Protection
Annuities may help reduce the impact of market downturns by offering partial or full principal protection, depending on the contract and the issuing insurance company.
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Tax Efficiency
Annuities allow your funds to grow on a tax-deferred basis, giving your investments the potential to accumulate more over time to support your retirement goals.
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It all starts with a conversation
Speak with an advisor to explore how annuities can fit into your retirement plan. By reviewing your goals, risk tolerance, investment style, time horizon, and liquidity needs, an income strategy can be developed to help keep you on track toward your long-term retirement goals.
Things to consider
What will your retirement lifestyle be like and what will it cost?
Are you prepared to create your own retirement paycheck from your investments?
Do you want to reduce your risk by protecting what you've saved until you're ready to retire?
An annuity is a contract with an insurance company that is specifically designed for retirement purposes. When you purchase an annuity, you make a payment to an insurance company that, in turn, agrees to pay out an income stream or a lump-sum amount at a future date. Annuities are primarily designed to deliver a predictable income stream that can be used to cover essential expenses, such as housing and food, in retirement. However, some annuities offer downside protection from market volatility by guaranteeing all or part of your original investment while still participating in market gains.
Annuity earnings accumulate on a tax-deferred basis. Withdrawals of earnings are subject to ordinary income tax rates and a 10% additional federal tax may apply to withdrawals before you reach age 59½. You should consult with a tax advisor before making tax related investment decisions.
Annuities offer a range of features that can be selected based on your individual needs and preferences, giving you flexibility in managing your retirement savings. Some common annuity types include:
- Income Annuities that offer a lifetime income stream that will start on a future date chosen by you at the time of purchase.
- Fixed Indexed Annuities with Optional Income Benefits that offer 100% principal protection against market risk and investment growth potential through returns tied to the performance of market indices, growing in a tax-deferred manner and offering lifetime income benefits, for an additional cost.
- Variable Annuities with Optional Income Benefits that allow you to participate in the markets by offering a wide range of professionally managed investment options aligned with your risk tolerance and time horizon and lifetime income benefits, for an additional cost.
- Fixed Annuities that offer a pre-established, guaranteed rate of return for a specified period.
- Fixed Indexed Annuities that offer 100% principal protection against market risk and investment growth potential through returns tied to the performance of market indices, such as the S&P 500®, over a variety of time horizons.
- Registered Indexed Linked Annuities that offer tax-deferred investment growth through returns tied to the performance of market indices, as well as providing limited downside protection.
No. Annuities are not bank deposits and guarantees under an annuity contract are backed only by the issuing insurance company. There is no additional insurance guarantee on the value or payout of an annuity.