• Guaranteed Growth & Lifetime Withdrawal Basics

  • Financial Mistake: Missing out on the power of guaranteed growth for a future lifetime check.

    Guaranteed Income Account Value Growth & Lifetime Withdrawal Basics

    Some fixed indexed annuities can provide a guaranteed lifetime withdrawal benefit for you, your spouse, or both (this is usually an optional benefit). A guaranteed withdrawal benefit on a fixed indexed annuity allows you to continue to take withdrawals from an annuity even if the cash value of the annuity eventually falls to zero. Annuities with this feature usually have a value often referred to as an Income Account Value (this terminology will vary from company to company).

    Some annuities offer guaranteed growth of the income account value, which can enable you to accurately predict the minimum value used to calculate your income check. Whether you are actively saving for a future income or have already begun drawing an income off of your retirement savings, this takes the guess-work out of income planning without relying upon hypothetical performance.

    Below are some common features of indexed annuities with a guaranteed withdrawal benefit.

    ♦ Lifetime Income continues even if the cash value falls to zero
    ♦ Many of these products have a predetermined minimum growth rate of the Income Account Value for the
       purpose of calculating a future income check.
    ♦ The Income Account value continues to grow until an election is made to receive income. At that point,
       the check is calculated upon the income account value multiplied by a payout percentage based
       upon age (and sometimes gender) and whether or not the check is for the duration of one life
       or two lives (for spouses who elect a joint payout)
    ♦ A minimum growth rate of an income account value allows you to know what your minimum check will
       be at a certain time in the future. The longer you wait to start your lifetime income withdrawals, the larger
       your check will be. Also, the longer you wait, the larger the withdrawal percentage of your initial premium will be.
    ♦ Usually this is an optional benefit for which there is a fee.
    ♦ Most contracts still allow for a 10% penalty-free withdrawal of cash values before turning on the life-time
       withdrawal benefit. Although in most cases a penalty-free withdrawal would reduce the income account value
       by the same percentage withdrawn, the income account value could still continue to grow in future years for the
       purpose of turning on a lifetime income. This offers flexibility to the contract hold-er in case an unexpected
       expense occurs.
    ♦ In most cases, this optional rider is only available at purchase and cannot be added later. However, many
       contracts do allow for the rider and the fee to be terminated after purchase.
    ♦ In most contracts, the cash value is the death benefit for the beneficiaries.
    ♦ Some annuities allow the option for a guaranteed lifetime check that will increase over time. Others only
       allow for a level check once turned on.
  • Discover how much your guaranteed check can be! 

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    *Guaranteed minimum growth rates, payout factors and income for life details vary per contract. Ask your Future Benefit agent for details. Note that distributions from traditional IRAs prior to age 59 &1/2 are taxed as ordinary income and may be subject to a 10% IRS federal tax penalty. Note that interest distributed from non-IRA annuities and Roth IRAs are subject to ordinary in-come tax and may be subject to a 10% IRS federal tax penalty.

    See our Professional Disclaimer