Three common misconceptions about income annuities
When it comes to retirement planning, your array of options may seem overwhelming. Between personal savings, employer plans, and government benefits, there’s a lot to take in. One solution that’s often misunderstood is an income annuity.
If the goal is guaranteed income, there’s a simple way to think about annuities – policyholders can receive income now or income later. Guaranteed income annuities provide income now, through Single Premium Immediate Annuities, or income later, through Deferred Income Annuities. The money in an annuity—which is invested as a lump sum or a period of payments, depending on the policy—generates a stream of income paid out for life.
While it may seem simple now, there are some misconceptions about how income annuities work. Here are the most common ones:
Certain annuities, like the New York Life Mutual Income Annuities*, pay income now or later, with the opportunity for dividends. While not guaranteed, dividends can provide additional income on top of the guaranteed lifetime income.
With both Single Premium Immediate Annuities and Deferred Income Annuities, there are several types of payout options that provide your loved ones with a death benefit in the event you pass away. Typically, beneficiaries would receive the amount you put into the annuity less any income you had already received.
If policyholders have unexpected short-term cash needs, some income annuities offer options to accelerate payments or make withdrawals.
Now that you’ve got a basic understanding, speak with a financial professional to learn more about if income annuity could be right for your retirement plan.
* Mutual Income Annuities are issued by New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010. Products are available in jurisdictions were approved. Annuity guarantees are backed by the claims-paying ability of New York Life Insurance Company. The policy form number for the New York Life Lifetime Mutual Income Annuity is 214-P200. The policy form number for the New York Life Future Mutual Income Annuity is 215-P200.
This educational, third-party article is provided as a courtesy by Lawrence Jean-Louis, Agent, New York Life Insurance Company.
To learn more about the information or topics discussed, please contact Lawrence Jean-Louis, agent, New York Life Insurance Company at email@example.com. Neither New York Life, nor its agents, provides tax, legal, or accounting advice. Please consult with your professional advisor for tax, legal or accounting advice.