Should I Pay For A Guaranteed Lifetime Income Rider?
Have you ever bought something and you didn’t understand how it worked? No, why would I buy something I didn’t understand?? WELL– Do you really know HOW your car works? It starts, it drives, I get the oil changed from time to time, But
It’s typical and we don’t even realize it.
As you near retirement and prepare to live on a fixed income, accounts which can provide sustainable income, such as an income rider, become great options. You can control your tax liability and stay in control of your money. Some tools have options or riders which enhance your account. They may be
Growth & Income
The rider boasts of guaranteed growth. As your retirement grows before you begin making withdrawals you defer your growth and your tax payment. As the years go on your account will compound and grow along with the rider. The rider will have a guaranteed earnings percent, such as 6%, which means regardless of how the stock market is performing your rider value will increase 6%. WHOA! What an amazing benefit! Then I can take income from an account growing at 6% per year. Sign me up!
But hold on. The rider has a time frame and other stipulations. If you purchase a product with this benefit at age 50. The rider might expire before you need to start taking the income. You will have paid the fee for 7, 10, 15 years without using the benefit. Think twice before paying for something that you may not need or know how it works.
The guaranteed lifetime income is a wonderful option for some older retirees. We have met with several younger retirees who were still working when they purchased a product with this rider. Watch out for any added benefits
Would you buy a car then never listen to the radio or use the air conditioner? Or put the batteries in the electronic but never turn it on? Probably not. Be wise and get
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