Retirement Advantage

[Lisa558]

Lisa558,

IIRC you were - what I'll call - in a benefits career? Either as an advisor or provider? (Sorry if I'm not remembering that correctly).

If I do remember correctly, could you talk about payout types for annuities. My understanding is, and it all depends on the contract, is that benefits can simply end with the death of the receiver, they may be provisions for a "death benefit" depending on how far into the annuity and remaining value, or there may be options for survivorship to provide incomie to a suviving spouse.

And this can greatly impact the "cost" of the annuity contract and the benefits received. So for example an annuity with survivorship may have the same "costs" be the annuity amount is less because the insuer is assuming risk for two people in terms of longevity.

WW

No, I wasn’t in a career like that, but before I made my decision I did a LOT of research, both on my own and with my Fidelity guy.

But yes, there are all sorts of variables:

1) One life or two

2) The term - lifetime? 10-year certain? 15-year certain? The payment will be less than a lifetime payout, but with period certain, your heirs get the remaining term, and with lifetime the payments stop upon your death.

3) The age that payouts start - and whether you want it locked in. So, for example, you can pick 85 locked, or the flexibility to start earlier if you end up needing long-term care before then. (Of course, your payments are less for this “flexibility,” even if you don’t start until 85.)

For me, I locked at 85. That’s because I know that if I end up needing LTC at 80, I DO have funds to cover five years until the payments start at 85. Then, at 85, I know I will be covered for life.

- disclaimer: remember, this was NOT my career. This is merely my understanding based on my own research, and talks with my own advisor.

 

[WorldWatcher]

No, I wasn’t in a career like that, but before I made my decision I did a LOT of research, both on my own and with my Fidelity guy.

But yes, there are all sorts of variables:

1) One life or two

2) The term - lifetime? 10-year certain? 15-year certain? The payment will be less than a lifetime payout, but with period certain, your heirs get the remaining term, and with lifetime the payments stop upon your death.

3) The age that payouts start - and whether you want it locked in. So, for example, you can pick 85 locked, or the flexibility to start earlier if you end up needing long-term care before then. (Of course, your payments are less for this “flexibility,” even if you don’t start until 85.)

For me, I locked at 85. That’s because I know that if I end up needing LTC at 80, I DO have funds to cover five years until the payments start at 85. Then, at 85, I know I will be covered for life.

- disclaimer: remember, this was NOT my career. This is merely my understanding based on my own research, and talks with my own advisor.

Thank you. Apologies for misremembering.

WW