And that’s where a variable annuity can help. They’re insurance products designed to provide you with a way to accumulate tax-deferred savings while you prepare for retirement, and a steady stream of retirement income. You can treat variable annuities as a complement to other retirement accounts like I R As, 401(k)s and pensions — but they may also work as a standalone solution.
How a variable annuity can help?
Here are some typical retirement concerns:
You’re worried about giving up your paycheck
Challenge:
You’ve been pretty good about saving for retirement, but still worry about giving up your regular paycheck. How can you turn savings into income?
Possible Solution:
Variable annuities can help you manage regular expenses with a guaranteed monthly income stream during retirement.
You don’t want to outlive your savings
Challenge:
All your grandparents lived well into their 90s — if you do, too, you’re anxious about outliving your retirement savings.
Possible Solution:
Variable annuities can provide guaranteed income for life or a set amount of years you choose. (Note: Guarantees on annuities are backed by the claims-paying abilities of the issuing insurance companies.)
You want to keep up with inflation
Challenge:
Your savings need to keep up with the rate of inflation.
Possible Solution:
Some variable annuities enable the policyholder to elect an optional living benefit. Such benefits can provide built-in inflation protection — either with an increased rate of return each year or a rate of return pegged to the inflation index. These benefits may require additional fees, charges, expenses or investment restrictions, and they may be subject to eligibility limitations.
You’d like to leave a legacy
Challenge:
If your retirement years are cut short, you want to leave whatever you didn’t spend to your family, loved ones or favorite charitable organization.
Possible Solution:
You can choose a variable annuity with a guaranteed death benefit. Your heirs will receive your initial investment or your balance at the time of death — whichever is greater.
Farmers Insurance and Financial Services Agents can discuss variable annuity options
Variable annuities offer returns based on market performance, with the added feeling of preparedness that steady income can provide. They are designed to help mitigate the risk of outliving your assets, and to help steady the ups and downs of the markets.
Because products vary, it’s important to choose an annuity suited to individual needs. Your Farmers Insurance and Financial Services Agent can help you understand options, and provide information about fees and any tax implications for withdrawals.
We’ve spent 90 years putting customers first — with personalized attention and information to help you understand your investment and insurance coverage options.
Contact a Farmers Insurance and Financial Services Agent in your area today.
Variable annuities are subject to insurance related charges and fees. Purchasers of variable annuities should consider the objectives, risks, charges and expenses of the contract and underlying investment options before investing. Contact a Farmers Insurance and Financial Services Agent for a prospectus that contains this and other important information; read it carefully before purchasing. Past performance of any investment does not guarantee future results; investment returns will fluctuate so such shares, when redeemed, may be worth more or less than the original amount invested.
Performance of variable insurance contracts will be affected by annual mortality and administrative expenses and is subject to a declining deferred surrender charge. Income payments are guaranteed by the insurance company, but subject to the company's claims paying ability. Withdrawals and/or other distributions of taxable amounts, including death benefits, may be subject to ordinary income tax and a possible 10% federal tax penalty if taken prior to age 59½. Withdrawals may reduce the value of the death benefit and any optional benefits. Please consult your tax preparer or C P A.
Lieutenant Matt Hamilton is a post commander for the Ohio State Highway Patrol.
He walks drivers through a step-by-step approach to handling common roadside emergencies when you’re stuck on the side of the road.