For some people, the income that is received from an annuity can make the difference between a stressful retirement and a carefree time in their life. But how can you choose the right annuity income option?
Not all annuities are the same. The differences not only include the way your return is calculated but how – and how long – you will receive the income. Some annuities also offer various guarantees. So, it is important to understand the alternatives that are available to you.
Ways to Receive Annuity Income
Typically, you will have several options available for receiving income from an annuity. These may include:
- Period Certain – One annuity income option is referred to as period certain. That is because the annuity will pay out an income stream for a certain amount of time – such as ten years. If the income recipient (i.e., the annuitant) dies before the allotted time period has elapsed, the annuity will continue paying out income to a beneficiary for the remainder of the time period.
- Lifetime Income – As its name implies, the lifetime income option will pay income to the annuitant for the rest of his or her life – no matter how long that is. There may also be a joint lifetime income option available where the annuity pays out for the remainder of two individuals’ lives. Married couples or partners will oftentimes choose the lifetime income option in order to ensure that both will receive an income for life.
- Life with Period Certain – The life with period certain annuity income option will pay out income for the rest of an individual’s lifetime. However, if he or she dies before a certain time period has elapsed – such as ten or twenty years – then the income will continue for that time to a named beneficiary.
Are You Ready to Learn More About the Retirement Income Options Available to You?
Although there are many different ways to generate retirement income, not all strategies are right for everyone. So, in order to determine the best income generation method for you, it is necessary to first sort out your short- and long-term objectives, as well as the possible expenses you may have.
Reviewing the many different types of annuities with a retirement income expert can be a great way to narrow down which one – if any – will meet your needs. If you’re ready to learn more, give us a call.
At Annuity Gator, our mission is to educate consumers about how annuities work, and how they can provide you with the worry-free retirement you deserve. We can be reached via phone, toll-free, at: (888) 440-2468, or you can send us a message through our secure online contact form to schedule a time to chat with one of our retirement income specialists.