How an Annuity can provide you with lifetime Income.

When you purchase a fixed index annuity you should be expecting to draw income from this annuity at some point in your lifetime. Most annuities have income riders that grow separate than your account value. This is called your income base or your income bucket. The longer you wait to draw income your income bucket will grow larger and larger. Insurance companies set a declared rate either compounded or simple interest. if you look at the examples below you can see how waiting to draw income can give you a higher income percentage from your initial investment.

Example One:

A 65 year old female purchased a $150,000 annuity for herĀ IRA. When she turned 70 years old she started drawing out income on her annuity. She started receiving a guaranteed, $15,000 a year for life, without annuitizing her policy. If you take into her life expectancy she would receive $300,000 of total income in her lifetime from her $150,000 investment.

Example Two:

A 70 year old male purchased an annuity for $500,000. A year later at the age of 71, he was able to receive $35,000 a year for life, without annuitizing.

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