A Guaranteed Income for Life?

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Jim Lorenzen, CFP®, AIF®

In a previous post I talked about how everyone now has to be his/her own actuary, if they want to create a guaranteed income for life.

I’ve even provided a 20-minute educational video on how it’s possible to actually create a guaranteed income for life.  I think you’ll find it helpful; grab a cup of coffee and you can register to take a look.

While I’m at it, here’s a link to a report that takes a deeper look at a a ‘hybrid’ scenario many investors might find attractive.  I think you’ll find the report interesting, if not eye-opening.  You can access it here.

How does one GUARANTEE an income for life?  Well, there’s only ONE way to guarantee that outcome:  An annuity.  NO OTHER FINANCIAL TOOL WILL DO THIS.

Oh, yes, they do get bad press (what doesn’t?).  The real problem, though is the confusion around the different types of annuities that exists.

  1. Variable annuities
  2. Equity-indexed annuities
  3. Fixed annuities – can be either immediate or deferred

Options #1 and 2 can be problematic.  They are often loaded with excess costs, moving parts, and restrictions.

Option #3 is generally more straightforward.  It’s more of an I.O.U. with the insurance company.  You pay them; they pay you.

Here are some sample payout examples.  Take the first one:  the payout represents a 6.54% payout; and as you can see, the payouts do increase with age.

There’s a trade-off, however, the money is not just illiquid – it’s gone!  You are essentially buying an income stream for life!   You’re paying cash for a secure retirement.

So, should you do that with all your money?  Probably not.  It should not be an ‘all or nothing’ strategy.  That’s why I think you’ll find this report on a hybrid strategy helpful.

If you would like help, of course, we can always visit by phone.  Just pick a time convenient for you.

Enjoy!

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

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Jim Lorenzen, CFP®, AIF®

Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® in his 21st year of private practice as Founding Principal of The Independent Financial Group, a fee-based registered investment advisor with clients located in New York, Florida, and California. He is also licensed for insurance as an independent agent under California license 0C00742.  IFG helps specializes in crafting wealth design strategies around life goals by using a proven planning process coupled with a cost-conscious objective and non-conflicted risk management philosophy.

Opinions expressed are those of the author.  The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Jim's picture
Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® in his 21st year of private practice as Founding Principal of The Independent Financial Group, a fee-based registered investment advisor with clients located in New York, Florida, and California. He is also licensed for insurance as an independent agent under California license 0C00742.

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