One of the dreaded feelings that baby boomers are facing is possibly outlasting their money. This is the main reason why annuities are one of the best decisions for late life retirement plan. They give an ensured return on your investment on long term basis. Annuities can be used as a secondary source of fixed wage to supplement social security too. This is critical in light of the fact that if you start your social security plan today at 62 years old, you’d get $1,992 which isn’t sufficient to pass the government poverty line.

Imagine that you are living on this little to no retirement amount. As you age, your health will start deteriorating and definitely, your Medicare will get the bills. Sadly, over 70% of retirees will have costs denied by Medicare. These expenses can hit up to $220,000 as indicated by one industry pioneer. The unquestionable reality is that you won’t have the capacity to proceed with your current lifestyle alone on Social Security income and Medicare.

An immediate fixed annuity is the best option for your stability which gives the capacity to not only just survive but also to enjoy your golden years of life. You can also decide on the advantages of a variable annuity with a guaranteed lifetime withdrawal benefit (GLWB). Both of these choices will provide you a solid source of income that is almost difficult to outlast.
Which plan is the best for you? That relies on upon 2 things – the amount of investment income you have and the amount of risk you are willing to place on your retirement income.

Immediate Fixed Annuities
An immediate fixed annuity warrants paying fixed income installments that keep going for a predetermined period. Most fixed annuities will pay more than 20, 30 or 40 years. You will continuously receive the same payment and there is no liquidity in the framework. When you have paid the initial value to the insurer, it is no longer accessible without high early termination fees.
This is an extremely inflexible method that turns over all control of investing choices to the insurer. There are huge advantages to picking an immediate fixed annuity such as higher pay-outs toward the start of the arrangement.
If you are one of the 40% of baby boomers living in US who have gathered over $100,000 in retirement reserve funds, this is the best plan for you.

Variable Annuities with GLWB
In a variable annuity with a guaranteed lifetime withdrawal benefit (GLWB), the insurer will secure your investment and restrict into a minimum yearly withdrawal limit. You will dependably have a fixed yearly income, yet your regularly scheduled installments may fluctuate. Unlike an immediate fixed annuity, you will be able to choose from different funds. To catch market growth by your investments, you can choose to continue funding your variable annuity.
Although your variable annuity will certify your withdrawals, the final pay-out may sometimes be lower than an immediate annuity. Yet, if the fund and market choices increase in value, potentially your variable annuity will outperform a traditional fund.
If you are in the verge of your employment time, as a future retiree with savings between $15,000 and $25,000, variable annuity would makes the most sense for you. But remember that both retirement annuity plans may undergo ordinary income tax.

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