The purpose of an income annuity is to protect against the fear of outliving your money. No matter how long you live (or your spouse if applicable), you will always have the security of a regular monthly income. The amount you receive each month is guaranteed and payments will continue as long as you live (or your spouse if applicable).
If you are in or near retirement, you probably have some money set aside in the form of savings, CDs, mutual funds, 401(k) plans, or an IRA. An income annuity allows you to convert a portion of your retirement funds into a stream of guaranteed lifetime income payments using a single premium or through flexible payments over time. In return, you receive a check monthly, quarterly, semi-annually, or annually. This income is guaranteed for the rest of your life (and your spouse if applicable), starting when you choose.
An income annuity is not subject to stock market performance. Regardless of the ups and downs of the financial markets, you can be confident that your income annuity is locked in and guaranteed. Income annuities provide riders that will guarantee your income value to grow anywhere from 4-10% each year until you decide to start withdrawing income. You will always know what your income value will be. With this product, you set aside a part of your assets to help cover future living expenses. The income checks help make it easier for you to stay on budget and to ensure your basic needs are covered. Income planning versus income guessing is how we protect you from the unknown.