By Jim Hallisey / Ozark Financial Services, Rogers

Most of us have insured many important areas of our life.  Perhaps you have health, homeowners, auto, long term care, and life insurance. However, have you insured your retirement income? What have you done to guaranteed a paycheck to last the rest of your life, no matter how long you live?

 

The danger of running out of income is a very real one depending on where your nest egg is kept. The Wall Street Journal  contends that if you take no more than 2-3% from a stock portfolio each year, you’re pretty much bullet-proof against outliving your funds.  They say 4% gets a bit iffy;  and 5% or more means you are almost certain to run your “income well” dry.  This makes sense when you consider that the S&P 500 index has only increased 9.23% since March 15, 2001; that’s not 9.23% per year -- but for the entire decade.

 

You might be asking, “So, Jim, you have identified the problem.  What do you propose we do about it?”

In other articles I have extolled the virtues of Fixed Indexed Annuities (FIA) and shared the reasons why so much of my own and my clients’ nest eggs are held there.  None of us has ever lost a penny to market volatility in these vehicles.  In previous articles we have discussed how you can be the beneficiary of the stock market’s increases but never again the victim of its darker down side. 

Today we will explore how one of the FIAs newer and lesser known benefits can offer assurance that we will never ever have to run out of income despite what the market may throw at us.

It is called different names by various insurance companies, but they all boil down to a lifetime income rider (insurance of future income).  No one has shown me a better alternative that guarantees we will not outlive our income.  The indexed balance within our annuity grows at an unpredictable rate tied to market increases but protected from market losses.  Meanwhile our income rider is growing at a totally predictable guaranteed rate  that allows us to take a predetermined income at the age of our choice and for as long as we live. 

 

 

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Here's an example:  A 50 year old woman could place $100,000 of her life savings in a fixed indexed annuity with the rider.  At age 65 when she is ready to retire, she will receive $11,434 per year guaranteed to supplement her retirement income for the rest of her life.  Eureka! 

No more worry about her “income well” running dry.  In fact, multiple issues are solved with this one unique financial vehicle.  She enjoys safety and opportunity on the same dollars at the same time, receives a bonus to jump start her account, has more than adequate liquidity and when she begins to take income from her annuity’s rider, the payment is guaranteed to last the rest of her life.

 

Is it time for you to look into insuring your income?

 

This article provides general information and is not intended to provide legal or tax advice.  Jim Hallisey (AR Ins. Lic. #98440) has spent the past 11 years with Ozark Financial Services helping people prepare to live out their hopes, dreams, and goals in retirement.  He does so with an emphasis on producing safe, steady, secure growth creating a tax efficient income stream that his clients cannot outlive.

 

Call him at 479-936-7890 with your questions or to schedule a visit.  You may also learn more at his website www.jimhallisey.com