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an annuity for retirement

An Annuity for Retirement

– All at Once or Bit by Bit?

 

ivon t hughes

June 26, 2013

 

By

Ivon T Hughes

 

 

Jill, 65, and Dave, 67, are both active retirees. They’re also good friends, meeting regularly at their Montreal bridge club or just for coffee in town. While there’s no shortage of things to talk about, every once in a while the conversation turns to the financial aspects of retirement planning. Not that either Jill or Dave has much to worry about. Both of them opted to buy life annuities and benefit from the life-long income that the annuities generate for them. They each did it their own way however, which leads to some friendly discussion and a bit of harmless ribbing along the way.

 

Planning for Future Expenses

 

Dave bought his annuity a few years back. “I wanted to make sure that on top of my pension I’d have the income to give me a reasonable retirement. I wasn’t planning on giving up my vacations or other leisure activities, and even if I’d paid off my house a while back, I knew I was going to have certain lifestyle outgoings for some time to come. My retirement income had to cover that without being stretched.”

 

Getting Set Up for Life

Dave’s decision was to use a lump sum he got when he stopped working to buy a life annuity, which guarantees him regular income for the rest of his days. “I looked at other options, like the term certain annuity, but I feel in such good health that I think I’ll last till I’m 100!” Indeed, the term certain annuity would have provided bigger regular income payments, but only for a fixed period. Dave’s decision to buy the life annuity was determined by his wish to make sure he wouldn’t outlive his financial resources.

 

Dave’s point of view about annuities is basically:

 

Dave laughs. “Jill, buy your other annuity now and get set up for life, like me! You’re not really going to spend the rest of your life poring over interest rates, are you?” Jill smiles good-naturedly. “Dave, if it takes me a little extra effort to optimize my income and still have something I can leave to my children and my grandchildren, then I’m happy to do the work!”

 

If either Dave’s or Jill’s situation sounds familiar and you’d like to know more about your own retirement options with an annuity, then call us today at (phone number) for a friendly, open discussion free of charge.

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