If we knew exactly how long we were going to live, it wouldn’t be difficult to know how much money we need available in retirement. Unfortunately life expectancy tables and guesses are the best we can do when trying to determine how long we’ll be around. Online source theadvertiser posted an article by Georgianna “Shelly” G. Latino entitled “Life length, retirement are connected” with information on retiring effectively. According to recent studies, children that were born in 2002 are expected to live well into their 70’s, 74.5 for males and 79.9 for females. Life expectancy numbers increase often because of medical advances and trends in lifestyles and the longer you live, the longer you are expected to live.
So the question lies in how to finance the long future that many of us will enjoy. Retirement income needs to last for several decades in order to avoid the longevity risk of outliving one’s money. Immediate annuities are the solution listed in Latino’s article. By purchasing an immediate lifetime annuity using a one time lump sum payment, a guaranteed income stream will be paid to the investor over the course of their lifetime without being subjected to market risk. Numerous “riders” are available that can provide you with even more benefits. To protect against inflation, you can add the option of having an annual increase. There is also a cash refund option where any remaining principal you did not receive in monthly payments will be refunded to your heirs, were you to die before expected. An immediate annuity can secure your retirement future.
