Protect Your Retirement Income

Annuities and Tax-Free Income

Will your money last as long as you do?

If you’ve ever used a retirement calculator, you probably have been surprised by how much retirement savings you will need to cover your living expenses and healthcare. This doesn’t even include any travel or activities you might be looking forward to enjoying. Besides annual IRA contributions and any workplace 401k, you might be looking for more peace of mind with guaranteed retirement savings. Especially if you have already maxed out these options and are looking for safe investments with available liquid assets. CEG Life Insurance Services has a couple of different options to maintain and increase a healthy retirement income portfolio.

Retirement Annuities

Retirement annuities can be a safe and sure way to guarantee retirement income as opposed to other investments. When you consider the volatility of the stock market, company share prices and dividends, finding options with guaranteed distribution can be a better alternative or diversification to a current portfolio. Various options can give you a tailored plan that works for you in terms of payment terms and rates. CEG Life Insurance Services can work with you to find the best options for you and your family if you are:

  • Concerned about outliving retirement assets
  • Interested in secured monthly payouts
  • Needing guaranteed lifetime income
  • Looking for tax-deferred growth
  • Close to retirement age and looking for more ways to invest without risk

Retirement Annuity Options

  • Fixed Annuity – A fixed annuity can basically be described as a bank certificate of deposit. The carrier of the annuity is guaranteed a predetermined interest rate over a period of time, such as five years. When that period ends, the payout will be an interest rate tied to investments. The benefit of a fixed annuity is that it provides predictable income.
  • Indexed Annuity – These annuities have a variable interest rate tied to the value of a stock market index and the changes therein. An indexed annuity usually has a protection built in so that there is a minimum payout rate even if the stock index goes down. However, on the flip side the maximum earnings are usually capped even if the stock index is having a great year. Indexed annuities are a “safe” way to benefit from stock market gains without losing during the downturns.


Is Your Retirement Money Protected from Taxes?

Did you know that a cash value life insurance policy (whole life or universal life) is one of only two types of accounts that allows you to accumulate and distribute earnings tax-free? The other account is a Roth. However, a Roth has some restrictions on who can participate, how much you can contribute, and when you can withdraw earnings, that a cash value life insurance policy does not.

Some of those Roth restrictions are:

  • You must have earned income.
  • You must earn less than $214,000 (if married).
  • Your annual contributions are limited to $6,000 (or $7,000 if age 50 or older).
  • You must be 59 ½ or older to withdraw earnings without penalty or tax.
  • You must own the account for at least 5 years to withdraw earnings without penalty or tax (if you are 59 ½ or older, earnings are subject to taxes but not penalties).

While there are some exceptions for withdrawals, these rules put in place restrictions on who can benefit from a Roth account, when they can benefit from it, and how much they can benefit.

However, a cash value life insurance policy does not have these same restrictions. There is no earned income requirement; there is no income-cap to prevent wealthier people from benefiting; there is no standard contribution limit; and there are no age limitations on when you can start withdrawing earnings tax-free.

As a result, a cash value life insurance policy can be a great retirement asset that allows you to supplement your retirement income with tax-free money. Additionally, it can offer growing long-term care benefits at a fixed cost that are not subject to the “use it or lose it” requirement of traditional long-term care insurance policies. Finally, a cash value life insurance policy can provide a built-in inheritance for your children or grandchildren for pennies on the dollar that is guaranteed to pay out no matter when you die.

The First Step Starts with Planning

With the right planning, retirement annuities and cash value life insurance can give you and your family peace of mind for the income to meet expenses. Call CEG Life Insurance Services for a review of your retirement portfolio. If you are looking where to invest for guaranteed lifetime income, tax-free retirement income, and growing long-term care insurance benefits at a locked-in cost, annuities and cash value life insurance policies are important assets to add to a well-rounded retirement financial portfolio.

Whether you have maxed your 401k or IRA savings, or are looking to diversify your retirement income and tax-burden, contact CEG Life to learn more.

Insurance Planning Articles

Additional expert advice to help you with your insurance planning

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