What Is An Income Rider On An Annuity?
ฝัง
- เผยแพร่เมื่อ 8 ก.พ. 2025
- You've heard about annuities, but aren't exactly sure what income riders are and how it will affect the type of annuity you are interested in. In this episode, I'll be sharing all there is to know about income riders on annuity to help you make an informed decision before getting one. I also have a free gift for you at the end of this video so make sure to watch out for that!
Watch and Enjoy!
Stan The Annuity Man
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Key Moments in this Episode
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00:40 What we will tackle in this episode
01:15 What is an income rider and what does it solve for
01:26 How it works
02:46 The benefits
04:11 The limitations
06:28 How to quote/structure choices
07:43 Where it fits in your portfolio
Other Resources
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Video by Nate Woodbury
BeTheHeroStudios.com
/ natewoodbury
On a fixed indexed annuity with an income rider, what happens at the end of the contract if you never start the income stream?
I don’t understand the difference between a guaranteed income stream from an annuity and a guaranteed income stream from an income rider attached to an annuity.
The difference is in how the income is paid out and therefore taxed. Income from a SPIA is considered "annuitized". For non-IRA funds, each payment is part interest and part return of principal. A portion of each payment is taxable (interest). With most income riders it is considered a withdrawal. For non-IRA funds, the income is paid out Last-In-First-Out (LIFO). That means the initial income is fully taxable because it is all interest. Once all the interest has been paid, the income would be return of principal and not taxable. Both guarantee a lifetime income. I hope this helps. Thanks for watching!
Is an income rider issued by the same company issuing the annuity ?
An income rider is attached to the annuity. It becomes a part of the contract so yes, it is from the same company as the annuity.
A 400,000 DOLLAR ANNUITY WITH A FIXED INCOME OF 2000 MO. THEY SAY I CAN ONLY GET A 20,000 DOLLAR SETTLEMENT.IM 80 YERS OLD AND HAVE HEALTH PROBLEMS NOW.IS THERE ANYWAY OUT OR DO THEY KEEP THE MONEY.CAN YOU GET ANY OF YOUR MONEY OUT BEFORE I DIE?
I'm not sure which type of annuity you have. If it is a Single Premium Immediate Annuity or a deferred annuity that you annuitized for the income, no you can't cash that in. If it is an income rider providing the income, then you may have some account value left to cash in. In all cases what you could cash in for depends on how long you have been taking the income.
@@StanTheAnnuityMan retired in 2014 and it says income guaranteed till death.next question. if the economy fails and the dollar is worth near nothing--are they on the hook to keep paying me?
pension benefit guaranty corporation PBGC
They are on the hook to pay you the income until your death. That is the contractual guarantee.
ITS A SINGLE EMPLOYER PENSION PLAN.IF THEY SENT A STATEMENT SAYING YEAR TO YEAR THE MINUMAL FUNDING WAS DONE BUT THE AMOUNT THIS YEAR IS WAY ABOVE THE LAST YEAR----DO YOU GET AN INCREASE IN YOUR MONTHLY CHECK?IT SAYS THEY ARE BY LAW REQUIRED TO REPORT THE FUND.IT ALSO SAYS TO CONTACT THEM!!!
Once you buy a rider, everything is guaranteed and the "annuity" portion becomes irrelevant. Wouldn't it be better if insurance companies made Guaranteed Income Riders a separate product from an annuity? It would be less complicated.
There are products called Deferred Income Annuities, which are designed to provide future income only. They are very simple. The advantage to the rider is because it is attached to a fixed annuity, they are flexible. You choose to when to turn them on.
Not only the fee is taken out from your cash value! but that fake income guarantee as well! People with annuities are better off taking annual withdrawals that do not exceed the 10% max withdrawal than purchasing an income rider, that is going to drain your money with fees and fake guarantees.
David - Thanks for your comment, but I have to disagree. If the goal is creating an income stream that can NEVER end as long as you live, an income rider can be an excellent tool. It all comes down to the contractual guarantees. Just using the free withdrawal provision in the contract does not guarantee income for life. If you don't need a lifetime income stream then I agree, you shouldn't buy an income rider. Thank you for watching.
Explain monopoly money please.
Monopoly money is money that isn't real. You can take it in cash. You can't transfer it somewhere else. It is the number on which the calculation for the lifetime income is based.
I think he means you CAN’T take it in cash