Mountain View Insurance – Income Annuity
Income annuities provide a consistent flow of income to you and can be structured in many different ways. These annuities can benefit from the usual principal protection known from annuities. If the income annuity is tied to an index through the accumulation phase the principal of the account can never go backwards. The same is true for fixed annuities. The principal appreciates at the set rate through the accumulation phase. The great thing about income annuities is that you can defer the income phase or take income immediately in the form of a immediate annuity.
Income Annuity – Accumulation Phase
If you choose to purchase a income annuity you can choose to defer the income phase and start the accumulation phase. During this period your the value of the annuity will increase depending upon the type you choose. Two distinct types are the fixed annuity and the fixed indexed annuity. Both have advantages and both can be used for one person.
The advantage of utilizing the accumulation phase is that you can defer your income phase and have your cash values grow tax deferred. This is similar to how qualified accounts such as 401Ks and Traditional IRAs accumulate value. Once you begin to enter the income phase, then you will begin to pay taxes on the income.
Income Annuity – Income Phase
Once you choose to begin the income phase then the money within the annuity contact gets paid to you as a income stream. Some annuity contracts give the option for lifetime payments on their income phase. This is a great tool to use in retirement as many retirees are concerned about running out of money. This option provides a consistent flow of income which is very similar to how social security and pensions work. Income annuities can be a great tool when structured properly to your needs.
There are many options to consider when purchasing an annuity for your total plan. If you would like to speak with one of our professionals for a free review and consultation give us a call at (410) 262-3176 or fill out the form below.