Finance

Maximizing Your Nest Egg And Making It Last

Posted: 9/30/2011

To make the most of your retirement savings, you may want to consider an income annuity that ensures your savings last.

(NAPSI)—There’s good news for many whose retirement savings have been hurt by continued market volatility. You can create an investment strategy with an income annuity that works like your own “personal pension.” One payment provides you a steady stream of income for life, guaranteeing income in retirement no matter what the market does.

Income annuities benefit from an insurer’s pooling of risks with other annuitants to allow you to maximize what’s left of your nest egg and ensure your savings last a lifetime.

An academic study, “Investing Your Lump Sum at Retirement,” conducted by two professors from Wharton business School and Brigham Young University and sponsored by New York Life, showed that by using income annuities, consumers generated retirement income for 25 to 40 percent less money than it would cost to create an equally secure lifetime income stream using a traditional portfolio of stocks, bonds and cash.

In other words, a $300,000 portfolio can still provide lifetime income equal to what a $500,000 portfolio of stocks, bonds and cash would have generated before the markets dropped.

Some companies offer income annuity features such as inflation protection, which allows you to increase your income each year by a fixed percentage as a hedge against inflation, or that give you the option to benefit if interest rates rise over the next five years.

Additionally, some insurers offer a feature that guarantees the return of premium to your spouse or other beneficiary, or that provides ongoing payments to them should you die. Guarantees are backed by the claims-paying ability of the issuing company.

If you need access to cash, several companies offer access to cash at regular points in time or in emergencies. Accessing cash may incur tax penalties if taken before age 59½, so be sure to check with a tax adviser.

To make the most of your retirement, back it up with an insurance company you can trust. A company with a long, steady track record, such as New York Life, the largest mutual life insurer in the U.S., can help provide stability. New York Life Insurance and Annuity Corporation and its parent company, New York Life Insurance Company, hold the highest ratings for financial strength from all four major ratings agencies.

To learn more, visit www.newyorklife.com/lifetimeincome or e-mail retirement_income@newyorklife.com.