Immediate or deferred-income annuities offer a simple, cost-effective way to buy lifetime income for a portion of your retirement rollover. But beware. Thousands of annuity salespeople are hoping to grab your money and steer you toward their high-commission indexed-annuity product before January 1, 2018, when they will be required to act honestly under the fiduciary standard, and undergo background checks.
You're a target if you're one of the millions of Americans retiring and rolling money from a company 40l(k) plan into an IRA - and wondering what to do with all that money. You can easily do better, avoiding complex products with big commissions - and setting up lifetime income using immediate annuities and deferred-income annuities (sometimes called longevity annuities), with a portion of your IRA rollover.
Here are five steps to lifetime retirement income:
1. Take a look at your overall retirement income plans. You may receive Social Security or a regular pension check. Your IRA rollover needs to be invested so that a significant amount will grow in the stock market, likely offsetting potential inflation in the long run of your lifetime. But, once retired, you also need some safety in your investments - because you can't replace money lost in a market decline with new contributions. That's where a monthly, guaranteed lifetime check comes in using simple annuities. Unlike Social Security, that annuity check won't be adjusted for inflation. But it will provide fixed, lifetime income.
2. Take a portion of your rollover money, up to about 20 -- 25 percent, and buy the promise of a fixed check a month for life -- starting now or starting in 5 or 10 years when you're worried about needing extra money. These are called SPIAs -- single premium immediate annuities , or for annuities with a delayed payout, QLACs - qualified life annuity contracts. The monthly payments you receive will cover your RMDs (required minimum distributions) from the IRA money invested in the annuity. And the monthly income, as all IRA withdrawals, will be taxed as ordinary income.
3. Compare the monthly income you could get for your money. It's easier than you think - and you don't need an insurance agent to find out. Simply go to www.spia.direct to get started. (Don't be confused; it's not dot-com, it's dot-direct!) This website was created by long-time annuity expert and consumer advocate, Stan Haithcock - also known as "Stan The Annuity Man." He figured out a way to instantly compare single premium annuity offers from A-rated insurance companies or better, online - without any salesmen!
4. Keep it simple. At www.SPIA.direct you can get a real-time quote instantly, without giving your name or phone number. All you have to do is fill in your age, gender, state of residence, and the amount of money you want to put into the annuity in a single premium. With a click, you'll get a quote for the monthly check you could receive as long as you live, or a slightly lower amount if you want a guarantee that your beneficiary will receive any leftovers from your original investment that were not distributed before your death.
5. Take action easily. If you're interested, you can proceed online. Fill in your name and email address and click again. You'll instantly see the specific monthly amounts offered by nearly a dozen insurers. Choose one, and you can easily fill out the entire application online. Only then will a licensed administrator contact you, per insurance regulations, to arrange for the contract to be completed and payment arrangements made.
I know you're wondering whether you can trust this process, and trust yourself to make the right decision. The simplicity is almost scary. But single premium immediate annuities and deferred-income annuities are "commodities" - and the reason you need to shop all carriers.
You already know how to compare car sales prices online so you don't get ripped off. Now compare annuity income offers online. Taking this step could make a significant difference in your lifetime income. And that's The Savage Truth.