Leveraging a Variable Annuity to Create a Retirement Income Stream

Leveraging a Variable Annuity to Create a Retirement Income Stream  While many prior retirees were able to rely upon their corporate pension plans for retirement income streams, retirees of today are often forced to create their own future incomes. When planning for retirement, future retirees must consider their total financial needs. Then, they must determine the best withdrawal strategies to create an income to meet these needs. As the lifespan for retirees continues to increase and as the retirement age continues to decrease, many retirees are concerned with outliving their capital. One solution that many retirees are turning to for the resolution of both issues is the variable annuity. A variable annuity offers individual investors a method for the liquidation of their estate during retirement, while maintaining their ability to invest in stocks, mutual funds, or higher yielding bonds. While this investment option provides the annuity owner with a number of flexible options during the accumulation phase, there are just as many options available to the owner during the withdrawal phase. As individuals near their retirement age, they should give consideration to which variable annuity withdrawal strategy is most suitable for their household's needs. Some of the primary withdrawal strategies include:  'Straight Life Annuity- This strategy, also called a pure life annuity, provides an income stream to the annuitant for life, without a refund provided to the annuitant's family upon their death. This settlement option provides the greatest amount of risk to the account owner as there is not a survivorship option offered. 'Straight Life with Period Certain- This withdrawal option offers the annuitant a life annuity stream with a period certain. This means that the annuitant will receive an income stream for life, but that also the survivor will receive an income stream for a period certain, or pre-determined number of years. 'Flexible Withdrawals- In addition to the two income stream options mentioned, annuitants can also choose to receive withdrawals at random, as needed, without pre-determining an income stream at retirement. Some additional fees may be required with withdrawals that come before their set dates, however, this depends on the annuity. Each individual annuity owner should discuss their possible withdrawal options with a qualified financial advisor before making a selection to ensure that it is the most suitable for their given financial situation. Find out more on make money online without spending money