Brian Decker, Owner and Founder of Decker Retirement Planning talks today about what our viewers should be aware of with Income Annuities.
There is a deception to the Life Annuity or Income Rider. There are two parts to this deception. One is the guaranteed rate. During a ten-year accumulation period, you are given a GREAT rate that is guaranteed, like 6%. That is the “carrot”. Let’s say you are 65 and grow $100K at 6% for 10 years. It is now worth $179K.
The second part is the “catch”. The catch is when, at 75, you are told that your payout rate is 4%. If you give me $100 at age 75 and I give you 4% back, is that a good deal? It sounds good, right?
The catch is that 4% is on the Accumulation value. If you are 75 and give me $100 and I pay you 4% of that back to you, you are getting $4 per year and you have to live to age 100 to get your original investment back with ZERO interest.
At age 65 if you buy a life annuity or an income rider with $100K, the guaranteed rate of 6% grows it to $179K at age 75 and you get the payout rate of 4%, which means you get $$7,160 back per year for life. That means you have to live to age 89 to get your original $100K back. If you live to age 95 you make +1.2%.
In Brian’s opinion people are investing in these Income Riders or Life Annuities is that most do not know the details and think they get 6% for life which is not true.
We’d like to thank Brian and Decker Retirement Planning for the education and warnings against Life Annuities and Income Riders. Be sure to contact Brian and the team at Decker Retirement Planning by calling (855) 425-4566 to help you with your retirement questions. Brian and Decker Retirement Planning will help you plan for your retirement future.
By the way, you can go to their website and get Brian’s free book, The Decker Approach.
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