In this weeks video by Medicare School, Marvin Musick sheds light on an important financial tool that every retiree should consider: annuities. With the decline of guaranteed pensions, retirees often rely on their 401k, IRAs, and other investments to generate income. However, Musick highlights the near-impossibility of achieving a guaranteed lifetime income through these avenues, except for one exception – annuities.
Delving into the three main types of annuities – fixed, fixed indexed, and variable – Marvin Musick teams up with Steven Strickland, a top retirement planning expert, to clarify the different annuities unique characteristics and benefits. Fixed and fixed indexed annuities offer principal guarantees, ensuring your investment will not decrease in value. On the other hand, variable annuities come with greater risk but also the potential for higher returns. However, the spotlight falls on fixed indexed annuities with an income rider, which combines safety, growth potential, and the assurance of a guaranteed income stream for life.
Join Medicare School and Marvin Musick as they demystify annuities, clarify misconceptions, and equip you with the knowledge needed to make informed decisions about securing your retirement income. Subscribe to the channel for regular updates, comparisons, and strategies to help you navigate the complexities of retirement planning effectively.
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Every Retiree Should Know About THIS Annuity! 😱
As retirement approaches, many individuals worry about their financial security and ensuring that they have enough income to support their desired lifestyle. One financial product that has gained popularity among retirees is the annuity. Annuities can provide a stable stream of income for retirees, but not all annuities are created equal. There is one type of annuity that every retiree should know about – the fixed index annuity.
A fixed index annuity offers a unique combination of benefits that can make it an attractive option for retirees. Unlike traditional fixed annuities, which offer a guaranteed interest rate, fixed index annuities provide the potential for higher returns through a crediting method that is linked to the performance of a financial index, such as the S&P 500. This means that retirees have the opportunity to benefit from market gains while also being protected from market losses.
One key feature of fixed index annuities is the principle protection. This means that the initial investment is protected from market downturns, ensuring that retirees do not lose their principal no matter what happens in the market. This can provide peace of mind and stability for retirees who are concerned about the volatility of the stock market.
Another advantage of fixed index annuities is the option for guaranteed lifetime income. Retirees can choose to convert a portion of their annuity into a stream of income that will continue for the rest of their lives, providing a reliable source of income in retirement. This can help retirees feel more secure in their financial future and ensure that they have enough income to cover their expenses.
Furthermore, fixed index annuities also offer tax-deferred growth, meaning that retirees do not have to pay taxes on the interest earned in their annuity until they start taking withdrawals. This can help retirees maximize their savings and potentially lower their tax liability in retirement.
It is important for retirees to carefully consider their financial situation and goals before purchasing a fixed index annuity. While they offer many benefits, fixed index annuities also come with limitations and fees that should be fully understood before making a decision. It is advisable for retirees to consult with a financial advisor who can assess their individual needs and recommend the most suitable annuity product for them.
In conclusion, fixed index annuities are a valuable financial tool that every retiree should be aware of. They offer the potential for higher returns, principle protection, guaranteed lifetime income, and tax advantages, making them an attractive option for retirees looking to secure their financial future. By educating themselves about fixed index annuities and seeking the guidance of a professional advisor, retirees can make informed decisions to support their retirement goals.
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I’ve been retired for 2 yrs and I’m currently not drawing from IRA’s or taking SS. I have about 1.3M in investments ( including IRA) I’ve planned to start moving $ from IRA to Roth starting in 2024 while in a very low tax bracket. I’m thinking the a Fixed index might be a good option? If you use an income rider does this product still have a death benefit?
two weeks ago I didnt know anything about annuities. I have talked with two advisors to get some information, but I was unclear as to income riders. This video is so very helpful, I can not thank you enough. It may change my future for a better income. I was ready to get a plain fixed annuity, but now I have to re- think it all. Thanks again.
The main argument against this arrangement as described is the one negative to all annuities: You are looking at this from a “Present Value” perspective. The 7% growth rate for 10 years is a great deal. But it’s in 10 years. Inflation will have reduced the buying power of that amount. But the main inflationary drawback is that once the $200k is annuitized and turned into an income stream, it is fixed. Not just to the downside, but also to the upside. There is no more growth or compounding. If you live 30 years into retirement, that fixed $1,167 / month will have lost a great deal of buying power thanks to inflation.
Yes great…but what are the fees?
Nonsense forgot to mention fees ?
You selling it right
By far, the best breakdown of these topics ❤
I have 2 pensions
Or just put your money in SCHD, live off the dividends, and enjoy the annual raises that will most years keep pace or exceed inflation, plus you keep ALL the gains. Cut out the middle man…
Is this fixed indexed annuity with a guaranteed income rider the same as a Hybrid Pension which other Medicare brokerages are marketing?
Thanks for increasing my knowledge in personal finance and investment, I recently subscribed to your channel. I want to give a big shout-out to all those working tirelessly to earn a living and build wealth during this recession. My husband and I are both retired and debt-free, and we're living smart and frugal with our money. Despite the recession, we're still earning passive income thanks to our savings and investments in the financial market. Investing lifestyle has enabled us to earn a steady monthly income through passive means, and we're grateful for it:;'
There's no confusion. If an insurance company is involved. It's good for them, not the customer. Don't be stupid, people!
I'm retired. Ss, pension, defined benefit plan. How do I create income if not w/an annuity?
So, what happens if you buy a fixed annuity and the company you bought it from goes bankrupt?
What about immediate annuity?
Annuities are notorious for having high fees on the front end and even worse fees for surrendering. Bad advice!!
I researched annuities for over a year. I ended up purchasing a Single Premium Income Annuity. Know unknowns…I get $1600/mo for lifetime, period. No more fees.
My problem with my fixed indexed annuity is that the cash benefit is fixed at the time you start receiving benefits. There is no adjustment for inflation. In our modern economy, this is a deal breaker.
Annuities vary as an investment vehicle depending on the times, and now is a great time! Thanks for the vid
i have a question i see on y tube all these video about more money starting in july 33 states will add money to your ss , ssi or ssdi check until the end of the year about 100 per month is this real or just crap for these people to get more views heard nothing about this on the news did not get an email or letter fron ss either thankyou !!!
So is a five year cd a fixed annuity since it makes me 5% per year
How much money you need to start an annuity?
We retired this December 22 with social security and my 30 year state retirement. Paid 6% into it for that amount of time. So blessed and fortunate. Great informative video. Thanks.