Are annuities a good savings vehicle for retirees and pre-retirees?

Redefine and rethink your approach to retirement income by including flexible retirement annuities.

Is your retirement income enough?

Remember when you first started off in your career? Fresh-faced and ready to take on the world, the prospect of retiring one day seemed pretty distant: Work hard, save, and then retire with a potential pension, supplemented by Social Security. Easy, right? Well think about this:

  • The landscape of retirement has changed dramatically over the last few decades. With the number of traditional pension plans dwindling, the future of Social Security uncertain, the rising costs of health care, people are rethinking their approach to living in retirement.
  • Now, think of your monthly expenses, including housing, food, utilities, and healthcare, as well as your retirement goals. Whether your objective is to finish that master’s degree, hike the Appalachian Trail, start your own business, or perfect your tennis game, you need to ask yourself: Will I have enough money to retire and live comfortably?
Retired couple looking at how well their retirement annuities are performing with Infinite Retirement Solutions.

Income annuities as a retirement strategy

Income annuities are growing in popularity for those looking to fill the retirement income gap. With so many products to choose from, you may want to consider adding New York Life’s Guaranteed Future Income Annuity (GFIA), a flexible-premium, deferred-income annuity, to your retirement income arsenal.

How retirement annuities work?

  • When you purchase a Guaranteed Future Income Annuity (GFIA), you make an initial premium payment and select a future date at which your guaranteed lifetime income will start (two to 40 years from the initial premium payment; certain age restrictions may apply).
  • Then, during the deferral period, the time between your initial premium and your income start date, you have the option of making subsequent premium payments at any time (up until two years prior to your income start date). The initial minimum premium payment is $5,000, and minimum subsequent premiums are $100. Additional premium payments will receive the payout rates in effect when premiums are received.1
  • After your deferral period, you’ll begin to receive guaranteed income payments, which will last for the rest of your life, no matter how long and full your life may be. You can customize your payment stream to include another annuitant, legacy options, and inflation protection. (Note, limitations and restrictions may apply. Please ask your agent for more information.)

Retirement annuities for pre-retirees

GFIA appeals to pre-retirees between the ages of 55 and 65 who plan to retire in five to 10 years, allowing them to look ahead with peace of mind. 

Pre-retirees can benefit from a guaranteed, sustainable way to maintain income in retirement, potentially higher income payments than they could achieve elsewhere, and a reduction of some market risk from their overall portfolio during the final years of their pre-retirement, when the consequences of a market downturn could be significant.

  • Those nearest to retirement, are starkly aware that while mutual funds can be excellent long-term investments, their value will fluctuate and may fall significantly in a recession. 
  • Income annuities can offer the security and peace of mind needed to face the future with confidence and bring you closer to your retirement dreams. The flexibility of a GFIA can help jump-start a customized retirement income solution.

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1The ability to move the income start date is not available for the life only option or in Connecticut. The policy owner can accelerate the start of income payments to any date 13 months after the latest premium payment or defer income payments for up to five additional years from the original income start date selected. Payout amounts will be adjusted; this can be elected one time.

For most jurisdictions, the policy form number for the Guaranteed Future Income Annuity is ICC11-P100 (it may be 211-P100, and state variations may apply); for the New York Life Guaranteed Lifetime Income Annuity, it is ICC11-P102 (it may be 211-P102, and state variations may apply).  SMRU: 1612984

Issued by New York Life Insurance and Annuity Corporation (NYLIAC) (A Delaware Corporation) a wholly owned subsidiary of New York Life Insurance Company. Available in jurisdictions where approved.

Guarantees are subject to contract terms, exclusions and limitations, and the claims-paying ability of NYLIAC. This contract is irrevocable, it has no cash surrender value, and no withdrawals are permitted prior to the income start date. Income payments are guaranteed at least as long as the annuitant is living, provided the annuitant is alive on the designated income start date. Contracts in which a life only payout option is selected do not provide a death benefit either prior to or after the designated start date.

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Infinite Retirement Solutions (“Infinite”) is an independent provider of financial and insurance products, not affiliated with Medicare, Medicaid, or any other government agency. Information presented here is for general knowledge only and shouldn’t be considered personalized financial or insurance advice. We strongly recommend consulting qualified professionals like financial planners, tax advisors, and legal counsel to determine the suitability of any product or service offered by Infinite. Investments involve inherent risk, including potential loss. Specific product features, limitations, and exclusions may vary. Please refer to the actual policy wording for complete details. Infinite is headquartered in Florida.