While preparing for retirement is very exciting, it can also be stressful. You should use careful planning to make sure that you get the benefits you need when it's finally time to step away from your career. By combining your annuities and your life insurance, you can build one broad plan that sets you up for success in your retirement. Using both of these assets in your retirement ensures that you will have the benefits you need and, hopefully, set you up for financial independence. The team at Ebensburg Insurance is here to help you with your post-retirement plans. Now, let’s dive in.
What are Annuities and Life Insurance?
First, an annuity is a contract between the insurance company and the client that offers a way to reduce taxes and ensure yourself a steady flow of income upon your retirement. It is a type of insurance product that you buy and then with it set aside a large sum of money. In short, it is a guaranteed stream of income that covers all of your living expenses during your retirement. It could last for a specific fixed amount of time or it could last for the rest of your life. This is determined by what type of annuity you choose. Some reasons you would purchase an annuity include:
A determined need to save
An investment that will require less taxes be paid on it
A safe and steady flow of income
On the other hand, life insurance helps your loved ones stay afloat financially in the event of your passing. Life insurance works by paying a premium amount for a death benefit. Your beneficiaries, your family members or people who will be collecting the money after you pass, can use this money to pay for funeral expenses, cover debts you may have left behind, or as replacement income.
Why You Should Combine the Two
There are many reasons why it may be beneficial for you and your family to make the decision to combine your annuities and life insurance policies. From guaranteed income to tax benefits to estate planning, it is time for us to dive in.
Guaranteed Income After Retirement
The first and most obvious benefit to combining your life insurance and annuities is a reliable source of income during your retirement and a death benefit for your loved ones after you pass. Usually, there is also an option to use some of the money that has accrued in your life insurance to purchase an annuity. This means both you and your family are covered. There are different types of annuities for you to choose from, but what we are going to discuss today is the time period your annuity will last for. There are some that last a pre-determined amount of time called a period-certain annuity. This means that if you pass away during this time period, your beneficiaries will continue to receive the payouts until the allotted amount of time is over.
There are also conventional annuities, which payout until you pass, which is a completely unknown amount of time. This type of annuity will not continue to pay out your beneficiaries when you are gone. If you are confused on what type to choose, talk with your insurance agent. They can give you all of the information you need to make a decision and even recommend what they may think is the best course of action for you.
Tax Benefits and Diversification
Both of these assets to your retirement plan can provide you with tax benefits. Annuities eliminate the requirement for paying taxes on your payouts. Also, life insurance is usually not taxed, which helps your beneficiaries in the long run. Both of these things also help to diversify your portfolio, even after retirement. Annuities give you a better idea of what your income will look like post-retirement. Having both annuities and life insurance protects your retirement.
Talk to An Insurance Agent Today About Combining
Making sure you have both annuities and life insurance upon your retirement protects not only you but also your family. It gives you control over where your money goes and helps you manage your bills and debts after you retire. This time in your life should be relaxing, not demanding. Meeting with a professional to discuss your options will give you peace of mind, ensuring your income for the future. Here at Ebensburg Insurance, our agents are ready to guide you through the process and come up with a solution that is best for you and your loved ones. Contact us today by giving us a call at 814-472-9557 or sending us an email at office@ebensburgins.com.
