[Narrator] Question: How well can I live on a fixed income during retirement? Allianz answers.
When you plan for retirement, you're really deciding how much money you'll need for the rest of your life. Most people talk about living on a fixed income that includes Social Security because they're guaranteed to receive that income through retirement, and to supplement that, many people add savings of their own, because Social Security may not cover all their wants and needs, and its future is uncertain.
Now you may be thinking, it seems like a good amount of money now, what's wrong with having a fixed income? A fixed income is fine, as long as your expenses are fixed, too. And considering the overall trends in inflation, the money you save today could lose value over time, and that might impact your purchasing power in ways you hadn't planned.
Say you're retired, and you have a fixed income. For now it covers the things you have to spend money on, like housing, food, fuel, and health care costs, as well as the things you want to spend your money on, like a night at the movies, a trip to the mall, or a special occasion. That'll be the case for a while, but as the years go on, you can bet your costs will go up, and meanwhile your fixed income is, well, fixed.
So, then what do you do? Well, you can't avoid your medical bills, your housing costs aren't going away, and there's only so much you can cut from your food budget. So you end up having to hold back on the things you really enjoy, like trying a new restaurant you've been meaning to visit, or a weekend out of town. And what about your grandkids' birthday gifts? Sounds a lot less fun, doesn't it?
If you're relying on sources that offer limited ways to increase income, there could be some tough decisions ahead. That's why you may want to supplement your retirement savings with another source, such as an annuity that provides the potential for your retirement income to increase through an income benefit. Or, if you're willing to take on some market risk in exchange for growth potential, you might consider a variable annuity.
[On-screen disclosure] An income benefit or income rider can be optional or built in and may have an additional cost. Distributions from an annuity may be subject to a surrender charge. Distributions are also subject to ordinary income tax and, if taken before 59½, a 10% federal additional tax may apply. The potential for increasing income is not guaranteed and what is required to realize an increase may vary by annuity. [End of on-screen disclosure]
Now, a variable annuity is subject to investment risk, including possible loss of principal. If you have one, your investment returns and principal value will fluctuate with market conditions so that units upon distribution may be worth more or less than the original cost.
[On-screen disclosure] Variable annuities are subject to investment risk, including possible loss of principal. Investment returns and principal value will fluctuate with market conditions so that units, upon distribution, may be worth more or less than the original cost. [End of on-screen disclosure]
In the case of either annuity, even with the cost-of-living adjustment from Social Security, the opportunity for increasing income lets you do more with your savings so you can still afford the things you have to spend money on for as long as you live. And when that income has the potential for annual increases, it's a way to maintain the standard of living you want to have in retirement, so you can spend your money on the things you really care about. That's the way it should be.
Talk to your financial professional about how Allianz can help provide a guaranteed source of lifetime income with a potential to increase. If you don't already have a financial professional, you can contact us for help at AllianzLife.com.
For complete information about fixed annuities, ask your financial professional for a contract or Statement of Understanding that outlines the risks, fees, and expenses, as well as other information.
For more complete information about variable annuities, and variable investment options from Allianz, ask for a prospectus from your financial professional, or Allianz Life Financial Services LLC, 800.624.0197. The prospectuses contain details on investment objectives, risks, fees, and expenses, as well as other information about the variable annuity and variable investment options which you should carefully consider. Please read the prospectuses thoroughly before sending money.
This content is general information for education purposes, and is not intended to constitute fiduciary advice. Please consult your financial professional for a specific recommendation about purchasing this product.
Annuities can help you meet your long-term retirement goals by offering tax-deferred growth potential, a death benefit during the accumulation phase, and a guaranteed stream of income at retirement.
You should carefully consider the features, benefits, limitations, risks, and fees that may be associated with an annuity, as well as the expenses, investment risks, and objectives of the underlying investment options in a variable annuity. Ask your financial professional if an annuity is appropriate for you based on your financial situation and objectives.
Withdrawals or partial surrenders will reduce contract values and may incur surrender or withdrawal charges.
Withdrawing more than the allowed annual maximum from a contract with an income benefit will reduce future lifetime income payments and could cause the annuity contract to terminate.
Guarantees are backed by the financial strength and claims-paying ability of the issuing company. Variable annuity guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions.
The maximum annual income withdrawal may need to be taken in order to be eligible for an income increase.
With the purchase of any additional-cost riders, the contract’s values will be reduced by the cost of the rider. This may result in a loss of principal and interest (or gains) in any year in which the contract does not earn interest or earns interest in an amount less than the rider charge.
Please note that Allianz Life Insurance Company of North America (Allianz), its affiliated companies, and their representatives and employees do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.
• Not FDIC insured • May lose value • No bank or credit union guarantee • Not a deposit • Not insured by any federal government agency or NCUA/NCUSIF
Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. Variable products are distributed by their affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297.
Products and feature availability may vary by state and broker/dealer.
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Allianz Life Insurance Company of North America
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