Pacific Income Provider Annuity Review
Make the Most of Your Retirement
You’ve worked hard, saved diligently, and now it’s time to enjoy your retirement. Working with your financial professional, you have an opportunity to create a unique retirement strategy that can help maximize and protect your income for the rest of your life.
During your planning, you may find preparing for retirement to be a challenge. Pacific Income Provider—a single-premium, immediate fixed annuity—can help you address each of the following key concerns in retirement.
Where will I get the income to sustain the lifestyle I’ve planned?
Social Security and pension benefits provide the average retiree with about 37% of his or her total income in retirement. This means that 63% of the average retiree’s income is derived from his or her own investments.
Source: Social Security Administration, Income of the Aged Chartbook, 2008.
How can I ensure my income lasts for my lifetime?
Because of advancements in medicine and increased health awareness, people are living longer. Between 1900 and 2007, life expectancy in the U.S. increased by more than 60%. For a 65-year-old couple today, there is a one in two chance that one person will live beyond age 90.
Sources: Department of Health and Human Services, A Profile of Older Americans, 2009; Society of Actuaries, Longevity Report, 2006.
How can I protect my retirement income from market fluctuations?
Market swings and interest-rate changes can have a negative impact on retirement income, making it challenging to plan for future income needs.
How will I deal with the rising cost of medical care?
Seniors spend more per capita on healthcare expenses than any other age group. Research shows that Medicare only covers half of these expenses. The average couple retiring at 65 will need $197,000 to pay healthcare costs in retirement.
Source: Center for Retirement Research at Boston College, 2010.
If you’ve asked yourself any of these questions, you have taken an important step in planning for the future. About a year before retirement, only 22% of retirees started to seriously plan for the inherent challenges that this phase of life brings. (Source: Employee Benefit Research Institute, Fast Facts, 2010.)
Pacific Income Provider can help by providing you with an income guaranteed to last a lifetime. Guarantees are based on the financial strength and claims-paying ability of Pacific Life.
Helping You Enjoy a Comfortable Retirement
An immediate annuity can be an important part of your retirement portfolio. By allocating a portion of your retirement savings to Pacific Income Provider, you may be able to stretch your retirement dollars to provide you more income with the same amount of assets.
I contacted Immediate Annuities.com to buy one of my immediate annuities. They were prompt, very responsive, paid attention to detail, understood my objectives, and were superb when it came to staying on top of seeing the funds transfer and issue of new policy documents through to completion.
Pacific Income Provider offers a pension-like stream of guaranteed, consistent income for your lifetime or for a specified period of time. You may choose to receive your first income payment anytime within the first year, and despite market fluctuations, you can be confident that your income amount will never vary because of market performance.
Pacific Income Provider gives you two unique options allowing you to adjust future income payments to protect against inflation or to plan for a future change in income, such as receiving Social Security benefits.
Pacific Income Provider can provide you with advantages if you purchase with after-tax assets (nonqualified). When you begin taking income payments, your tax liability is spread out over time, giving you tax-advantaged income. Each income payment is composed of earned interest, which is taxable, and a partial return of your original purchase payment on which you have already paid taxes.
Who’s Who in an Annuity?
It’s important to know who the key parties are in an annuity contract.
Owner - The owner makes the decisions about the annuity, such as how much money to put into the contract, and is the recipient of the annuity income payments. The owner also names the annuitants and the beneficiaries.
Annuitant - The owner and the annuitant may or may not be the same person. Either way, it’s the annuitant’s life expectancy that is used to set the dollar amount of future income payments.
Beneficiary - If the owner dies, usually the beneficiary is the one who has the right to receive the income payments.
There may be one or more owners, annuitants, and beneficiaries.
Future Adjustment Option
This optional, one-time adjustment feature provides you with the flexibility to adjust your income payments in the future, allowing you to plan your income according to your unique needs.
You can choose to increase or decrease your income payments to account for a future need for more or less income. The amount of your initial income payments will be adjusted based on your selection for future payments.
Here are two scenarios in which the Future Adjustment Option may be beneficial in addressing a change in your future income.
For example, you may choose to delay taking Social Security until age 70 to maximize your benefits. You could elect the Future Adjustment Option at the time of purchase to schedule a decrease to your income payments starting at age 70.
Or maybe you have a part-time job to supplement your current income, but plan on fully retiring when you are 70. By choosing to increase your future income, you can make up the difference.
The timing of the adjustment is up to you, but you can only elect the Future Adjustment Option at the time of purchase.