✅ In part 3 of this series on annuities, financial guru Jason Matthews breaks down what is a lifetime annuity, and how it can provide guaranteed income for life.
✅ He also shares the “secret sauce” why lifetime annuities can do just that, and are still the best way to guarantee income for life!
✅First off, there are two types of these annuities:
1. Lifetime Income Annuity Guarantees your income as long as you live, of course.
2. Period Annuity Guarantees income payouts for a certain period of time, like 5, 10, 15, or 30 years.
✅ Remember that these are insurance companies that give lifetime income and period annuities. Therefore, they are the only ones that can really guarantee you income without risk or a chance that you won’t get your money – not stocks, mutual funds, your pension, or any other investment vehicle.
✅ Insurance companies also pay out based on three factors:
1. Base principal So, if you put in $100k to start, that’s your base principal (although it grows).
2. Interest rate Your investment will grow based on the assigned interest rate or the index its tied to, although most annuities have certain caps and safeguards.
3. Mortality table or longevity credits Here’s the “secret sauce.” Insurers pool the funds of many clients who take out annuities, and payouts are shared from the “pot,” making it more stable and risk adverse for them – and therefore, guaranteed for you.
✅ Keep in mind that you want your annuity to cover your basic expenses in retirement like your mortgage or rent, utilities, food, healthcare, and any other monthly recurring costs to live.
✅ But your pension and Social Security can add to that, making sure you are comfortable in retirement as long as you live – guaranteed.
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✅ Contact me any time at Matthewsfinancial@gmail.com if you have questions or need help!