CALL US: (888) 440-2468

CALL US: (888) 440-2468

have an annuity question?
have an annuity question?

Choosing the right insurance company for your retirement income needs

Piecing together a retirement income plan can take some precision. Everyone’s financial needs and objectives are different, so there is no such thing as a plan or strategy that will work for all individuals, couples, or families across the board.

Choosing the right insurance company for your retirement income needs can also be somewhat challenging. Oftentimes, one insurer looks similar to another. But knowing which carriers to go with is critical, because you’ll want to know that they will be there when you need them – even if it isn’t for many years (or even decades) down the road.

Having a guide to help you through this process could mean the difference between a secure retirement with income that arrives for as long as it is supposed to, and a stressful time later in life that is filled with financial uncertainty.

Finding the Appropriate Safe Withdrawal Rate – If That is Even Possible

Safe withdrawal rates are about taking systematic withdrawals from a portfolio. But the question is, how much can a retiree withdraw from their savings without depleting all of their assets while they’re still needed.

In the past, 4% was considered to be a safe rate of withdrawal, given a portfolio that held an approximate 50% / 50% ratio of stocks and bonds. Today, however, with an unpredictable stock market and shaky global economy, many experts believe that a safe withdrawal rate is closer to 2.8%, and in some cases, it can even be as low as just 1.49%.

Based on this, it means that a portfolio of $1 million would only generate a yearly income of less than $15,000 – and this amount doesn’t take into consideration taxes, withdrawal charges, and/or other potential fees. Is this enough for you to live on – both now and in the future?

What to Look for in an Annuity Carrier

When choosing an insurance or annuity company, there are several areas to be mindful of, including its:

  • Reputation/history. Just like in many other industries, it is recommended that you check out the history and reputation of an insurance carrier before you commit to purchasing a policy or annuity. There are some insurers in the industry today that have been in business for well over a century, while others are just starting out.
  • Reviews/testimonials. Customer reviews and testimonials are another good barometer of how an insurer does business – including how receptive it is to its policyholders.
  • Ease of doing business. The ease of doing business with an insurance company can be a key factor, too. Some ways that insurance companies can make doing business with them easy is by offering online premium payments, online reporting for claims, and 24/7 customer service representatives.
  • Selection of policies and products. While some insurers focus primarily on certain types of coverage, such as life insurance or annuities, it is good to know that an insurer has more than just one single offering available to its customers.
  • Financial strength and stability. One of the key factors in choosing an insurance company is its financial strength and stability. If an insurer is unable to pay its claims, then it could have a negative impact on your – and your loved ones’ – security and lifestyle going forward.

How Insurance Companies are Rated

There are five independent agencies that rate insurance companies, based on their financial strength. These include:

  • A.M. Best
  • Fitch
  • Kroll Bond Rating Agency (KBRA)
  • Moody’s
  • Standard & Poor’s

While each of these agencies uses a slightly different rating system, it is typically easy to tell which insurers are ranked the highest (i.e., the most financially stable), based on the letter or numerical grade that it is given.

All five of these agencies don’t rate all insurers. However, even if an insurance carrier is only rated by two or three of the agencies, it is recommended that you review all of the ratings, rather than just one. This can help you to get a better feel for the stability of the insurer.

It is also important to review what the rating agencies say about an insurer, rather than only focusing on what the insurance carrier itself has to say. That’s because the insurance company may highlight a higher rating from one agency while ignoring or glossing over a lower rating from another agency.

Need Help Finding the Right Insurer for Your Retirement Income Needs?

There are literally hundreds of insurance companies that offer annuities, so finding the right company for your specific needs can be somewhat overwhelming – that is, unless you work with an annuity specialist that can help you with this task.

At Annuity Gator, our primary focus is on educating consumers (as well as financial professionals) on how annuities work, as well as on how to choose the best option – if any. You can find reviews of fixed, indexed, and variable annuities directly on our website.

In addition, you can also talk directly with one of our annuity specialists who can answer any questions that you have, assist you with comparing different annuities (including ones that you already own), and walk you through the details about an insurance company’s ratings.

So, feel free to contact us directly at (888) 440-2468 or by going to our secure online contact form and letting us know what you need assistance with. We look forward to hearing from you.

Choosing the right insurance company for your retirement income needs

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