Information courtesy of USAA Life Insurance Company and USAA Life Insurance Company of New York
Help maximize your retirement with an immediate annuity.
The very idea of a paycheck can excite you. When you're in the workforce, payday is something to mark on your calendar. It's the day when all your hard work comes to fruition.
That's why the idea of retiring and having that paycheck suddenly disappear can fill people with questions like "Did I save enough money?" and "How am I going to continue to do the things I love now that I'm retired?"
On the latter question, it's important to figure out what you consider "essential" in your retirement. This goes beyond the obvious answers like rent, mortgage payments, food, health insurance and the like. Do you visit your family regularly? Then consider travel expenses an essential in your retirement. Are you an avid theatergoer? A regular donor to charities? A frequent giver of gifts to your grandkids? You'll want to make sure that you can continue to afford these essentials once you're no longer working. After all, no one wants to have to change their lifestyle in retirement.
Once you've determined what you can't live without in retirement, it's time to set up a plan to pay for it.
Starting your retirement, and what comes next
The retirement industry does a great job of putting out information about the importance of saving for retirement. There are calculators and graphs and articles that tell you how important it is to save a specific amount by your retirement date in order to have enough to live on.
What they may not tell you is what to do with that money during your retirement. Once you have saved it and then claimed it, what's next? You may suddenly have all of this hard-earned money you squirreled away throughout your working life. How do you turn that nest egg into a source of income that allows you to accomplish your goals while managing the common risks retirees often encounter?
That's where an immediate annuity comes in.
The payroll department for your retirement
While you are employed, you typically have a payroll department whose responsibility is to make sure that you receive a salary. But in retirement, there is no such department. You need to find your own way to turn a lump sum of retirement savings into something that will help ensure you are able to maintain your lifestyle and that you don't run out of money in the long run.
Unlike many other options you could have in your retirement portfolio, an immediate annuity is not an investment product and should not be compared to stocks, bonds or bank products like CDs. Instead, an immediate annuity is an insurance product that can be an efficient and simple answer to the question "How do I generate steady, reliable income from my retirement savings?"
You buy an immediate annuity with a lump sum so you can receive protected income for a set period of time or for life, depending upon the payout option you select. This money is guaranteed See note 1 and will not be impacted by a sudden market downturn. Since you can set the term for the payout on your immediate annuity, you can pass the regular paycheck down to your beneficiaries should the worst happen.
So, back to your essentials. USAA Life Insurance Company recommends meeting these expenses in retirement with protected income, like the paycheck for life that comes with an immediate annuity. With it, you may be able to cover your essential expenses as you define them without having to worry about running out of money.
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At USAA, we are passionate about empowering our members to realize a long, happy retirement.
You've already taken great steps towards this since your personal retirement income plan includes a deferred annuity. It has been growing tax deferred over the years at a guaranteed1 interest rate safe from market changes.
Part of your plan should also include having enough guaranteed income when you reach retirement because sometimes social security and pensions aren't enough.
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Now that you're a few years closer to retirement, it might be time to consider converting your deferred annuity into a stream of guaranteed income with USAA's competitive payouts2. Your annuity has a built-in feature to make this process easy. Plus, with a lifetime payout option, you can eliminate the risk of outliving your savings.
Our Retirement Income Specialists can help you develop an income plan to make your money last.
Schedule a call or call us now to walk through the best approach for receiving income from your deferred annuity so you can live your best life in retirement.
Description of visual information: [Visit usaa.com to learn more or call 800-531-3392.
1 Guarantees apply to certain insurance and annuity products and are subject to product terms, exclusions and limitations and the insurer's claims-paying ability and financial strength.
2 Money not previously taxed is taxed as income when paid. Withdrawals before age 59½ may be subject to a 10% federal tax penalty.
An annuity is a long-term insurance contract issued by an insurance company designed to provide a retirement income stream for life. Once the contract principal is converted into an income stream, you will no longer have access to your principal as a lump sum. Terms, conditions, limitations and surrender charges may apply
Use of the term "member" or "membership" refers to membership in USAA Membership Services and does not convey any legal or ownership rights in USAA. Restrictions apply and are subject to change.
Life insurance and annuities provided by USAA Life Insurance Company, San Antonio, TX and in New York by USAA Life Insurance Company of New York, Highland Falls, NY. All insurance products are subject to state availability, issue limitations and contractual terms and conditions. Each company has sole financial responsibility for its own products.]End of description.
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It's all about being prepared.
It all boils down to making sure you're ready. The key is to ensure that the gaps are filled between how you define and pay for essential expenses and what protected retirement income sources are available to you. With an immediate annuity, you may be protected from outliving your savings and have an opportunity to maintain your lifestyle in retirement.
USAA can detail what is and isn't right for you and help you make smarter choices throughout your retirement.
Protect your income in retirement.
To find out more about protecting your retirement income, call us at 800-531-3392.