Tag Archives: Guaranteed

Market Analysis

Protect Retirement Accounts And Eliminate Inflation Worries With a Guaranteed Income Pension

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Many people are worried about inflation in the near future and how this can affect our cost of living. Oil and energy are on the rise and with interest rates at a all time low. This is a valid concern that needs to be addressed. Those of us that are in the work force today should be concerned with inflation, however it will not have as much devestating affect us than on those that are retired or soon to be retired. If inflation goes up, so will our income. Retirees on the other hand have a set limited income base on which to live on and inflation can cause them to make major adjustments. If retirees have their money in the market they are exposed to the huge up and down swings the market has been experiencing the past few years. Alway remember that the market is a gamble, it has potential to grow fast, however it also has potential to have huge loses. Do you want to put your nest egg in this type of predicament.

I would strongly recommend against this strategy.If retirees have money in a bank CD, they have seen their return go from 5% to 1.5% in the past 5 years. Not a good source for income if you interest keeps dropping so does your income. Example a $100,00 CD at 5% payes $5,000 a year in interest, the same CD at 1.5% pays only $1,500 per year. If you were relying on your interest as a source of income, you income dropped from $5,000 a year to only $1,500. Thats why we recommend to consider a guaranteed pension style income. This type of retirement plan eliminates the worries about inflation, stock market volatility and low interest rates. You know that once you retire you will get a guaranteed paycheck for as long as you live. Knowing exactly how much money you can count on every month will make it easy for you to design the retirement life you want.

This year with the new law that allows us to rollover our qualified IRA’s and 401(k)’s into a Roth, with two years to pay the taxes owed. This will make retirement even better if no income tax has to be paid on income from our retirement accounts. So for some not all, you can roll over you retirement accounts into a tax-free retirement account, develope a pension with this money were you will recieve a guaranteed income check for the rest of your life and that money in turn will be also tax free.

Market Analysis

Find The Best Guaranteed Annuity Rates Using The Open Market Option

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Guaranteed annuity rates are the most popular form of annuities and can be found using the open market option. The open market option was introduced to let retirees find guaranteed annuity rates from the entire market avoiding being forced to purchase the rates from the pension company they had saved with.

There are many different types of annuity that can be purchased at retirement, but by far the most popular is the guaranteed annuity, this is because of the guarantee that the income cannot fall during the life of the retiree. Those in retirement require certainty of income and do not want to worry about watching their annuity rates. Of course because the rates on guaranteed annuities are fixed there is no scope for income increases during retirement, meaning the longer you live inflation could eat into the buying power of the income.

Just because the name guaranteed annuity sounds as though the income cannot increase does not mean you cannot have escalating income, you can purchase an option for your guaranteed annuity to increase each year either by a fixed percentage or by the retail price index, this will mean the starting income would be lower than a guaranteed annuity without the options.

There are other options you can purchase when you buy guaranteed annuity rates, one of the most important and popular options is the continuing pension for spouse or partner, this means in the event of your death the pension can continue. The pension can continue at a percentage of the pension or a the full rate, again the starting income is lower and the more you wish to be paid as a continuing pension the lower the starting income of the guaranteed annuity. Other options that can be purchased at the same time are a guaranteed payment period and value protection, which pay out a amount to protect you if you die in the early years of retirement.