Most of us want a steady source of income after retirement that replaces as much of their pre-retirement earnings as possible. However, for many people, one big challenge in saving for that goal is finding the right financial product that accommodates their specific requirements, such as when they want to retire or how much more they need in addition to their Social Security benefits.

Financial professionals have been looking at the various moving pieces of retirement planning for many years. What they have found is that for some individuals, a smart route is to include deferred income annuities.  Learn More

The longer one waits to start claiming Social Security payments, the bigger the monthly check will be. However, the reality is that many people cannot or do not want to continue working until age 70, so they need a Plan B.

A Deferred Income Annuity (DIA) is a retirement planning option that can provide several advantages for individuals looking to secure future income. Here are some of the key benefits of obtaining a Deferred Income Annuity:

1. Guaranteed Income Stream: A DIA provides a guaranteed income stream that starts at a future date, offering financial security and peace of mind during retirement. This may be particularly valuable for managing essential living expenses.

2. Longevity Protection: By converting a portion of your savings into a DIA, you can protect yourself against the risk of outliving your assets. DIAs can provide lifetime income options, ensuring that payments continue for as long as you live.

3. Tax-Deferred Growth: The funds contributed to a DIA grow on a tax-deferred basis until distributions begin. 

4. Customization Options: DIAs offer various customization choices, such as the period before payouts begin, inflation protection, and beneficiary options. This flexibility allows you to tailor the annuity to fit your financial goals and needs.

5. Potential for Higher Interest Rates: DIAs often provide higher interest rates than traditional savings accounts or CDs because they lock in funds for a specific period. This can lead to a more substantial income payout later.

6. Protection from Market Volatility: Because DIAs provide a guaranteed income, they can be stable financial products that are not directly affected by market fluctuations. While guarantees are backed by claims paying ability of the issuing carrier. This option can help individuals feel more secure in their financial planning.

7. Estate Planning Benefits: Some DIAs Some DIAs allow you to designate beneficiaries, offering payout options and  terms that may result in payment(s) to a beneficiary after your passing. This feature can be particularly beneficial in legacy planning.

8. Structured Payout Options: DIAs can provide flexibility in how benefits are paid out, including options for monthly, quarterly, or annual payouts. This structure helps you align your income with your financial needs.

9. Potential for Inflation Protection: Some DIAs offer inflation-adjusted payouts, which can help maintain your purchasing power over time. This feature is helpful in ensuring income keeps pace with rising living costs.

10. No Required Minimum Distributions (RMDs): DIAs do not require RMD. This allows you to plan your withdrawals and provide potential tax advantages strategically. This benefit should be reviewed with your tax advisor. 

A Deferred Income Annuity (DIA) can be a valuable component of helping you worry less about living longer. Now is the time to determine whether a DIA is right for your retirement. Let’s connect and discuss how this option can offer the retirement lifestyle you are planning for.