An income annuity allows you to convert part of your retirement funds into a stream of guaranteed lifetime income payments using a single lump-sum of money called a “premium,” or through flexible premium payments over time, depending on the type of product selected.
Tax Favored Income
If an income annuity is funded with non-qualified money (not IRA, 401k, etc., the income from this annuity can be up to 90% tax-free and a lifetime income options for one or two lives may be selected.
If qualified accounts (IRA, 401k or 403b etc.) are used to fund an income annuity, the income will always be taxed however the income can be paid out over the life of the owner, regardless of life expectancy.
Income annuities can be used to provide guaranteed income for a period of years or for lifetime income and can be paid for the life of one or two people, for example, a husband and wife. They can also be used for future income to replace income from Social Security lost after the death of the first spouse.
For more information and to see if this type of annuity would be the proper type of option for you, call our office for a complimentary consultation and free income analysis.