Who doesn’t like the idea of a lifetime income plan? This becomes especially relevant as you’re moving towards retirement and need a fixed-term annuity plan to supplement your social security. When looking for an annuity income stream, it’s important to consider the factors affecting how much money you’ll receive.
Family First Life – Strong Tower & Hammer Lane Consultants in Dallas, TX, can help you understand what you need to know about annuities so you can make the best decision for your future.
We bring you five essential factors which can affect your annuity income.
1. What is your life expectancy?
Your life expectancy is one of the main factors that will affect how much annuity income you’ll receive. For example, statistically, as a woman, your life expectancy is more than a man’s; therefore, you can expect to receive less income from your annuity than a man would.
2. What is the inflation rate?
Another essential factor people often overlook when planning their lifetime income plan is the inflation rate. If you’re wondering how the inflation rate can affect your fixed-term annuity, it’s pretty simple. The inflation rate is inversely proportional to the annuity income. Hence, the higher the inflation rate, the less your annuity income will be worth in purchasing power.
3. What is the prevailing interest rate?
The interest that you earn on your annuity is in large part determined by the prevailing interest rate. When the overall interest rate is low, as it is these days, you will earn less income from your annuity than when it’s high. You must discuss the current rate with your financial advisor to ensure that your annuity is still a good investment.
4. What are the taxes on your annuity income?
In the USA, annuity income is taxed as ordinary income. This means that your annuity income will be subject to the same marginal tax rates as your other sources of income. Be sure to discuss your annuity income’s tax implications with your financial advisor or tax accountant.
5. What fees will be deducted from your annuity income?
Most annuities have some fees associated with them. These fees include charges for managing the allowance, withdrawals, and death benefits. Make sure that the costs on your fixed-rate annuity are not too high or out of budget for you.
Deciding on a lifetime income plan can be one of the best choices you can make to secure your future. However, you must ensure you hire a trusted consultancy to help you with the process.
Hiring a professional to help you with your annuity income planning is essential. They will provide you with the advice you need to ensure your money is safe. There are several types of annuities and lifetime income plans, each with its own rules and regulations.
Family First Life – Strong Tower & Hammer Lane Consultants, serving Dallas, TX, are experts in annuities, reliable insurance, retirement plans, and safe money investments for people of all walks of life.
We understand that each individual’s retirement is unique. We will evaluate your specific needs and goals to provide annuities most suitable for you.
Contact us now to learn more!