Searching for Guaranteed Income in Retirement? You Are Not Alone

By Kindur | August 8, 2019

Instead of pensions, most Americans today have defined contribution plans, such as 401(k)s. At retirement, these accumulated savings can be rolled into an IRA but with little direction from many financial advisors on how that money can be used as income. 

If you have adequate savings in an IRA, how much of that can you safely spend each year to support your lifestyle in retirement? This question isn’t a simple one to answer.

Deciding the amount of income you can spend each month in retirement is difficult primarily because retirees don’t know how long they’re going to live. This leaves many individuals with two choices. Spend a lot and enjoy retirement to the fullest at the expense of maybe running out of money, or spend little in the hopes that your money won’t run out later in life. 

However, there is an additional choice. An annuity can provide guaranteed income in retirement. At the most basic level, an annuity is a contract between an individual and an insurance company. In exchange for paying a set amount of money, usually a lump sum upfront, the insurance company agrees to pay out monthly income to that person for a set period of time. For those planning for retirement, annuities can provide an interesting benefit that cannot be found in many other financial products: guaranteed lifetime income.

Annuity contracts with this feature offer the certainty that the customer will receive the same payout no matter how long he or she lives. This lifetime benefit provides protection against what is known as “longevity risk” which is really just a fancy name for the risk of outliving your money. 

When considering the options available to modern retirees, it is important to ask yourself a few questions: 

  • How much of my savings would I be comfortable setting aside to fund a guaranteed amount of income? 
  • How much would I be comfortable having invested in a low-cost portfolio for growth? 
  • How much do I need in the event of an emergency or to cover medical expenses?
  • Do I plan on passing on some portion of my retirement savings to my heirs?

By looking at your own goals and what is important to you as you plan for retirement, it can help you understand what types of financial products may be the best fit for your needs, your risk tolerance, and your lifestyle.

As part of that holistic retirement picture, the guaranteed lifetime income offered by an annuity may be a helpful tool for getting through retirement without running out of money. At Kindur, we believe in providing our customers with the tools and knowledge to understand their options, decide what their particular retirement should like, and retire fearlessly.

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Kindur Investment Services LLC (“Kindur Investment”) is an SEC registered investment advisor. Investment advisory services are provided by Kindur Investment Services LLC (“Kindur Investment”) through its online platform and are available only to residents of the United States over 18 years old. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Past performance is no guarantee of future results. Any historical returns, expected returns or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings are for illustrative purposes only and are not investment recommendations. The content on this website is for informational purposes only and does not constitute a complete description of Kindur’s investment advisory services. Certain investments are not suitable for all investors and are not available to all Kindur Clients.

Before opening an investment advisory account (including for use of the Retirement Planning tool), you should review Kindur Investment’s Form ADV Part 2, which includes a description of certain risks, conflicts and fees associated with participating in the Kindur platform. Any references on this website to “guaranteed income” relate solely to the fixed annuity product offered by an affiliate of Kindur Investment and not to any investment advisory services provided by Kindur. Apex Clearing Corporation, a third-party SEC registered broker-dealer and member FINRA/SIPC, provides custody and clearing services for Kindur and serves as the custodian for advisory assets of Kindur clients.

Fixed annuity contracts are offered by Kindur Insurance Services LLC and are issued by American Equity Investment Life Insurance Company, an unaffiliated insurance company. “Guaranteed income” refers to income paid by a fixed annuity contract that may be sold to a client as a component of Kindur’s retirement platform. Guarantees do not apply to the safety of the contributions to a fixed annuity contract and are based on the claims-paying ability of the issuing insurance company. Detailed information about the fixed annuity can be found in the fixed annuity contract itself and other materials that may be delivered in connection with any application for or purchase of a contract. Early surrender charges also apply to the fixed annuity. Kindur and its affiliates do not provide tax or legal advice.

Fixed annuity contracts are not FDIC Insured and are not Bank Guaranteed. Taxable distributions (and certain deemed distributions) are subject to ordinary income tax, and if made prior to age 59 1/2 also may be subject to a 10% federal income tax penalty. Early surrender charges also apply to the fixed annuity.

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