How Do I Get Guaranteed Lifetime Income?
Find out the three ways to guarantee lifetime income.
How do I get a guaranteed lifetime income?
There are only three ways to receive a guaranteed lifetime income.
1. Social Security
2. Pension Plans
These are the only three ways that I know to get a guaranteed lifetime income.
Here is what my social security statement says about my benefits.
“Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because by 2036 the payroll taxes collected will be enough to pay only about 77% of scheduled benefits.”
How secure is social security? I have been paying into my account since 1966. There are 10,000 baby boomers that are retiring every day. It seems like we have so many people going into the social security system to receive benefits, but far fewer people helping to pay for and support social security. There may need to be a restructuring of the social security system, but as long as the government has the ability to tax we can expect some type of social security benefit. Social security is just one way to receive a guaranteed lifetime income.
Pensions are another way to receive a guaranteed lifetime income. There are not too many private pension plans available anymore. The government still has pension plans, but more and more we are seeing private companies doing away with pension plans and replacing them with 401Ks. 401Ks have really put retirement in the hands of employees. With 401Ks employees are able to make investment decisions, however, 401Ks do not offer a guaranteed lifetime income. It is just a lump sum. It is up to each person to decide how and when to invest that money. If you actually have a pension plan nowadays it does offer a guaranteed lifetime income.
The final option for a guaranteed lifetime income is through an annuity. An annuity is issued by an insurance company and comes with two different options. The first option is called an immediate annuity, where you hand over your cash to the insurance company and they will guarantee you a stream of income for either your life or a period of time you designate. The second annuity option that has a guaranteed lifetime income is called a deferred annuity. With a deferred annuity, you would put money into an annuity account and take what are called lifetime income withdrawals.
It is helpful to know your options for a guaranteed lifetime income. You can receive a guaranteed lifetime income with any of these three options, social security, pension plans, and annuities.