When life happens: Eleos Life shows how annuities help you plan for a long retirement<\/p>\n
People are living longer, and that is good news. It also means your money may need to last 25 or 30 years after you stop working.<\/p>\n
Kiruba Eswaran, CEO of Eleos Life, explains what annuities do and what to watch for.<\/p>\n
Step 1: Think of Annuities as the Mirror of Life Insurance<\/p>\n
Life insurance helps if you die sooner than expected and have not saved enough. An annuity helps if you live longer than expected and your savings run out.<\/p>\n
Step 2: Choose Between Growing and Getting Paid<\/p>\n
1. Grow: pay in, and your money earns a set rate for a fixed number of years.<\/p>\n
2. Get paid: swap a lump sum for monthly payments, which can continue for the rest of your life.<\/p>\n
Step 3: Weigh the Benefits and the Limits<\/p>\n
Annuities can give you a guaranteed rate and tax-deferred growth. But if you need the money early, fees can apply. Keep them for money you can leave alone.<\/p>\n
Step 4: Decide What Happens After You Are Gone<\/p>\n
Standard income payments end at death. If you want money to pass to your family, or keep going for a spouse, you can add a guarantee. That lowers the monthly amount.<\/p>\n
Step 5: Look at What Most Buyers Do<\/p>\n
Of the roughly $460 billion Americans put into annuities last year, about 96 percent went to growing savings. About 4 percent went to lifetime income. Most people use them as a steady place for money to grow.<\/p>\n