A lot of visitors come to Go2Income.com or other income annuity sites to find out how much income they can generate from a specific amount of retirement savings. The quotes they receive can be for an immediate annuity, deferred income annuity (DIA) or QLAC (a special form of DIA) purchased out of a rollover IRA account.
Visitors may be considering a new plan for retirement income, or they may be curious about how their savings translate into lifetime, guaranteed monthly income. Or perhaps they’d like to compare a quote to an annuity option out of their 401(k) plan or fixed income strategy they received from an adviser.
But they need to keep in mind that income annuity quotes are like quotes for mortgage interest rates in one important respect: They are only valid for a short time, often just one to two weeks.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Why updated quotes can be helpful
Remembering to update your quotes every so often keeps you current on changing market forces that might have an effect on your own plan.
Interest rates never stay in one place, and their movement can affect your potential income in many ways. You might think that news about interest rates won’t matter to you if you’re not looking to take out a mortgage. But if interest rates have risen since you last checked, the income annuities that you can buy with your savings today probably will also produce more money every year.
On the other hand, a dip in interest rates might mean those income annuities will return less in monthly payments. In that case, you might decide to act now to lock in income before it declines further.
In both rising and falling interest rate scenarios, annuity carriers are quite responsive. Of course, any income you previously purchased is fully locked in and won’t change as interest rates change.
Even if interest rates do nothing, one important factor is changing in your situation: your age. Every extra year affects the quote you will get on income annuities. At age 66, your income for an immediate annuity will be higher than at age 65. Changes in income for a deferred income annuity or QLAC will be different.
Also, new players constantly evaluate and enter the income annuity market with competitive rates. And some of the current insurance companies in the market that you have done business with may become more competitive. You won’t know about the new competitors unless you check a couple of times a year.
Comparing quotes to other market forces
Like most investors, you might take another look at your stock portfolio in light of the bull market, which is in record territory. If you have significantly more money in your account, you could buy an income annuity to lock in those savings for the rest of your life. If that growth is in a rollover IRA or variable annuity, you can purchase without a current tax hit. While we never suggest trying to time the market, no bull market lasts forever. A stock swoon isn’t the best time to sell off.
Knowing how much income your savings can guarantee might be helpful when you experience other changes in your personal financial situation, like receiving an inheritance or facing a large unexpected expenditure. Or if a child moved back home with you. If you recently married and there’s a significant difference in age, you may want to lock in income for the younger spouse.
Information on other developments that may be helpful
Financial professionals such as myself follow the industry more closely than you do. This attentiveness means they can bring you information in the income annuity world that might coincide with changes in your personal situation. The information can be beneficial in several ways.
Income annuities provide guaranteed income, whether you defer payouts or start them immediately. They allow you to stop worrying about whether you will run out of money before the end of your retirement. In the marketplace, however, companies often come up with new features that may make a difference in your decision process.
Taxes — major tax reform or a recent tax filing — could affect your finances. And when you are making plans for your estate or long-term care, you will want to know where to find the money to pay for any premiums.
In all those instances, that updated quote — and the information accompanying it — may come at just the right time.
How Go2Income quotes can help you
After you get your first quote from Go2Income.com, you will automatically receive an update each quarter, including information on new developments impacting income annuities. Go ahead and order your no-obligation quote and start the important step in securing your retirement.
-
Is Your Social Security Earnings Record Wrong? Here's How to Fix ItYour Social Security benefits are based on your Social Security earnings record. It's important to review your records to avoid having your benefits reduced.
-
Stock Market Today: Markets Discount Another U.S. DowngradeAfter Friday's closing bell, Moody's followed Standard & Poor's and Fitch and cut its rating on U.S. government debt.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Such Attractive Yields in High-Grade Munis Are Rare and May Not Last LongAccording to this munis expert, the last time munis were this cheap was a brief period in 2023. If you kicked yourself for missing out then, you have a second chance now.
-
Financial Analyst Sees a Bright Present for Municipal Bond InvestorsHigh-tax-bracket investors have an excellent opportunity to secure low-volatility, high-quality returns at yield levels rarely seen in over a decade.
-
I'm an Insurance Pro: How Not to Get Dumped by Your Insurance AgentYour insurance agent or broker might show you the door if you do any of these five things. Being a good customer is about more than paying your bill on time.
-
Two Estate Planning Issues You Should Never OverlookThis estate planning attorney explains why proper asset titling and beneficiary designations make a big difference when it's time to transfer your wealth.
