What Will Be Covered in this Review?In this review, we will be discussing the following information regarding the MassMutual RetireEase Choice Deferred Income Annuity (DIA):
- Product type
- Current rates
- Realistic long-term return expectations
- How it is used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.
If you are concerned about outliving your income in retirement – especially if you anticipate living a long life span – then the purchase of a deferred income annuity (or DIA) like the MassMutual RetireEase Choice Deferred Income Annuity could be right for you. Deferred income annuities – which are also oftentimes referred to as longevity annuities – are annuities where you can deposit a lump sum of money (such as that from a retirement plan, IRA, or other type of qualified or non-qualified account), in exchange for a guaranteed stream of income for life. Unlike an immediate annuity, though, this income stream won’t begin right away, but rather at a set time in the future – possibly even as far out as 30 or 40 years. Because of that, the amount of income that you receive from a DIA can be higher – in some cases, substantially more – than a regular immediate annuity. But, before going out and purchasing the MassMutual RetireEase Choice Deferred Income Annuity – or any annuity, for that matter – it is important to ensure that the product will fit in well with your overall financial goals and needs. Annuities are known for being somewhat confusing to understand – even for well-informed consumers (and in some cases, financial and insurance professionals). And, while you could take the time to read over the product’s fine print, that too can be somewhat overwhelming. That’s where the Annuity Gator comes in!
Annuity and Retirement Income Planning Advice that You Can TrustIf this is the first time you have been to our website, we would like to personally welcome you here to AnnuityGator.com. We are a team of experienced financial professionals who are dedicated to providing non-biased and in-depth reviews of annuity products. We’ve been at this for a number of years now – far longer than most of our “copycat” competitors – and because of this, we have come to be known as a highly trusted source of annuity information. If you’ve been seeking information about annuities online, it is likely that you have come across many conflicting details about these financial vehicles. This isn’t really very surprising, though, because there are a lot of opinions (both positive and otherwise) about these products floating around the Internet. You may also have recently attended a seminar about annuity products. During this workshop, the presenter may have touted information about the MassMutual RetireEase annuity (or some other similar annuity) and why the product may be right for you. This could have even been the catalyst that led you here to our website, in search of additional product details. Although there are a number of very good websites on the Internet that are focused on offering their annuity products, there are some that will attempt to lure you in with some pretty bold claims like:
- Lowest Fees
- Highest income payouts
- Guaranteed lifetime income
- Top-rated companies
MassMutual RetireEase Choice Deferred Income Annuity at a Glance
|Type of Product
|Deferred Income Income (DIA) Annuity
|AA+ (Very Strong)
Opening Thoughts on the MassMutual RetireEase Choice DIABecause an annuity’s guarantees are really only as strong as the insurance company that provides them, you need to consider the strength of the company that you select, and its anticipated ability to meet its future obligations. In the case of MassMutual, this company has been in existence since 1851, so it’s definitely got staying power on its side. As of September 30, 2017, the company had in excess of $237.3 billion in total assets, with more than $16 billion of that as surplus – so it is certainly able to pay out its policyholder claims. For the first three quarters of 2017, MassMutual had taken in more than $15 billion in premiums and annuity considerations for life and accident and health contracts. MassMutual is also highly rated by the insurer rating agencies, receiving an A++ (Superior) from A.M. Best Company, and an AA+ (Very Strong) from Standard & Poor’s. The company has also consistently paid out dividends to qualifying policyholders for more than a century. Given the decline in defined benefit pension plan offerings over the past few years, it is now up to individuals – not their employers – to make sure that there is enough money coming in each month to pay the bills, once the employer paycheck stops. With a deferred income annuity, the ups and down of the stock market will not affect the amount of future income you will receive. When you initially purchase a DIA, you decide when you wish to start receiving your income, and the insurance company will then guarantee you a set income that will start at your chosen date in the future. Many deferred income annuities will allow you to make subsequent contributions into the contract. However, the way that these are factored into your future income can vary from one DIA to another. It can also be dependent on the frequency of such subsequent contributions into the annuity.
Before we get into the in-depth details, we have some legal disclosures to present…This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Mass Mutual has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners. For more details on how to compare fixed annuities so that you can decide which may be the best one for you, click here in order to obtain our free annuity report.
How MassMutual Describes the RetireEase Choice Deferred Income Annuity (DIA)MassMutual describes the RetireEase Choice Deferred Income Annuity as a flexible premium deferred income annuity that offers guaranteed income that begins in the future and will last for as long as you live. With the RetireEase Choice DIA, you can annuitize (i.e., convert the contract over to an income stream on the earlier of 30 years after the issue date, or the annuitant’s 90th birthday. The annuity also has both single life and joint life income options – so you can include a spouse or other loved ones with regard to receiving lifetime income. There are also some additional “bells and whistles” on the RetireEase Choice. For example, if you have a non-qualified annuity and a monthly payment frequency, you can accelerate payments – in this case, a lump sum amount that is equal to either three or six annuity payments. (You can also do this five times over the life of the contract). There is also an optional inflation protection rider that, if chosen, will automatically increase the annuity’s payments by a specified percentage on each anniversary of the annuity date. (This must be elected at the time of issue – and if it is, then it cannot be canceled or changed going forward). For more of the in-depth details on this annuity, you can take a peek at the product literature HERE.
How an Insurance or Financial Advisor Might “Pitch” this AnnuityIf you’ve been offered the MassMutual RetireEase Choice DIA by an insurance or financial advisor, then it is likely that he or she keyed in on the fact that a set amount of income will be available to you later in life. This, in turn, can help to alleviate the concerns about running out of income – or even just simply not having enough in the future, when the cost of the goods and services you need will likely be higher. Also, deferred income annuities will oftentimes offer substantially higher income payouts than immediate annuities. This is because your age when you start such payouts is typically older than it would be if you take income from a regular deferred and/or immediate annuity. Therefore, this too is a feature that an advisor might focus on when discussing this – or any – DIA annuity with you. But before you get out your pen and sign on the dotted line to commit to this deferred income annuity, there are some things that you need to know that may or may not make the “tradeoffs” you’ll have to make worthwhile. As an example, the purchase of a deferred income annuity typically means that you will be forfeiting the principal that you’ve deposited in exchange for the guaranteed stream of future income. So, unlike many regular deferred annuities what offer a death benefit should the annuitant pass away, DIAs can differ. In this case, it is typically required that, in order pass on your deferred income annuity investment to your heirs in the event of your death, it could be required that you purchase an additional rider that will either simply return the original amount of your premium, or offer your beneficiary an income stream for a set amount of time. Plus, know that a deferred income annuity is not a liquid financial investment. In fact, once you have placed your money into this type of an annuity, you are usually going to forfeit all of these funds, and in turn, take the chance that you will live long enough to benefit from the future stream of income.
The Annuity Gator’s End Take on the MassMutual RetireEase Deferred Income AnnuityWhere it works the best: This annuity could be a good option for those who:
- Anticipate a long lifespan
- Will need retirement income in the extended future (up to 30 years before it begins)
- Are seeking a guaranteed income later in life
- Have a shorter life expectancy
- Need to keep their money liquid
- Do not plan to use the lifetime income feature