With people living longer and spending more years in retirement, you may be wondering if your current savings and retirement income will be enough to last your lifetime.
What is an annuity?
A good retirement income strategy needs to generate two to three decades of sustainable income. It should help to protect your assets from inflation, market volatility and savings withdrawal rates that may leave little or nothing for later retirement years or a personal legacy.
An annuity is an insurance product designed for retirement to help protect your financial future and the risk that you will outlive your savings. As part of an overall retirement strategy, an annuity pays you periodic income payments for as long as you live in exchange for a premium. There are different kinds of annuities—with different features and payment options to meet your specific needs and priorities. Compare your options.
Benefits of annuities
Annuities offer many benefits that will help you focus on enjoying your life today, knowing you’ve prepared well for your future:
- Guaranteed income payments for as long as you live
- No annual contribution limit
- Ability to diversify and potentially grow your investments
- Tax-deferred investments until they’re withdrawn
- Death benefit for beneficiaries
To decide if a variable annuity is right for you, consider that its value will fluctuate; it’s subject to investment risk and possible loss of principal; and there are costs associated.
Health and taxes are the top concerns of retirees, according to a survey by Lincoln Financial Group. The survey also found retirees are unsure about key information such as their state and federal tax rates, how much they will owe in taxes and reducing tax burdens.
While you can’t control tax rates or policy, you can take steps to help protect your savings and income from tax erosion while improving your spending power in retirement. Annuities allow your money to grow tax-free and defer payment until retirement.
- Taxes are the biggest surprise in retirement. Read the white paper. (PDF)
- Find out why tax planning for retirement is so important. Read the white paper. (PDF)
Lincoln Financial Group® affiliates, their distributors, and their respective employees, representatives, and/or insurance agents do not provide tax, accounting, or legal advice. Please consult an independent advisor as to any tax, accounting, or legal statements made herein.
Investors are advised to consider the investment objectives, risks, and charges and expenses of the variable annuity and its underlying investment options carefully before investing. The applicable variable annuity prospectus contains this and other important information about the variable annuity and its underlying investment options. Please call 888-868-2583 for a free prospectus. Read it carefully before investing or sending money. Products and features are subject to state availability.