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In retirement income planning, focus on the long run. Research studies project 25% of 65-year-olds today will live past age 90, and 10% past age 95. An effective strategy anticipates income needs for decades.
Did you know that with certain claiming strategies, you can receive up to 32% more money for life? Discover ways to get the most out of your benefits with our Social Security planning knowledge and expertise.
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“What is safe money?” That is a question that many Americans are asking. And it’s not surprising why. From retirement presentations and dinner seminars to weekend financial talk shows and radio commercials, safe money is a common theme in many public forums.
Generally speaking, a broad definition of safe money is “the money you can’t afford to lose.” Since everyone has different needs, goals, and situations, this concept means different things to every person. For some, safe money could be lifelong savings they have built up and need to preserve. Or it might be accumulated wealth that needs to be protected from risk, as it will be a source of retirement income.
For others, it could be a stockpile of money they will need at a certain time, like funding their children’s college education, paying off the mortgage, or buying a luxury item for which they saved a long time. Yet for some other Americans, safe money might be a future account balance – a sum of money that they want to grow safely and efficiently.
So, the answer to “what is safe money?” is it depends. Your own needs, goals, and situation provide the financial context of its meaning. But boiling down to the essentials, safe money is about security and protection… money that is safe and as free from unnecessary risk as is possible.
The short answer? Immediate annuities actually don’t come with an accumulation period. Once you have paid premium into the contract – in most cases a one-time lump – the insurance carrier will start income payments nearly right away. Your income payouts may start anywhere from 1-12 months after the premium payment date.
When this starting date is depends on your contract and frequency of payments. You may receive income on a monthly, quarterly, or even annual basis. Many contract holders opt for a monthly payment schedule.
The insurance carrier puts the entire sum of your premium into a pool of other premiums it has been paid. Then it allocates these premiums into conservative, low-risk investments. In return, the carrier pledges to make payments to you – or someone you specify – for a specified period of time, which can be for the rest of your life. The income you receive includes a fixed sum and interest paid on a continual basis.
Therefore, immediate annuities don’t have an accumulation period – there is little time between when you pay premium and start receiving income. Many immediate annuity contracts start income payments just a month after the day you bought your annuity.
Where accumulation periods do apply is with deferred annuities. In these contracts, your money will be left alone for a number of years before you start taking income. Let’s get into more details below.
"Dominion Retirement Income Planning distinguishes themselves in their dedication to consumer education, impressive experience in the financial industry, wide-varying knowledge, and commitment to helping their clients achieve their retirement financial and income goals. I recommend them as a source to turn to for expert, personal guidance with your income planning objectives."Brent Meyer Jr., Founder of SafeMoney.com