The Military Widow’s Tax Is Almost Gone
July 11, 2022 | 3 min. read
You’ve been planning and saving for your retirement for decades and now it’s finally here. But how do you change gears from accumulation to distribution? How, in other words, do you convert your investment portfolio into the income you will need to live on for the rest of your life?
Let’s take a closer look at one financial tool that could play a useful role in your retirement planning challenge. An annuity is a contract between you and an insurance company in which you make a lump-sum payment (or series of payments) and in return begin receiving regular disbursements, beginning immediately or at some point in the future.
Why should I consider an annuity?
The primary purpose of an annuity is to provide a reliable stream of guaranteed income. But annuities offer some additional advantages that can make them useful in the retirement planning process:
If I don’t need the income right away, will an annuity still work for me?
Selecting the right annuity is largely a function of whether you need income now or in the future.
What if I don’t need income, but I want some protection against market volatility?
Even if additional guaranteed income is not a priority, an annuity may have a place in your financial plan if you are uncomfortable with the prospect of market volatility and potential short-term losses in your portfolio as you approach retirement. Structured (or buffered) annuities offer the opportunity to participate in the potential growth associated with a market index like the S&P 500 while also providing some protection against losses. Fixed index annuities offer full market downside protection. Best of all, there are no additional fees associated with this protection.
Does an annuity make sense for me?
You are unique and so are your retirement income needs. The best way to determine whether an annuity has a place in your financial plan is to get a holistic assessment of your current financial situation and future goals.
To get a better idea of the different types of annuities available, visit www.firstcommand.com/investing-saving/income-planning. Then schedule a meeting with your First Command Financial Advisor to determine how to navigate your retirement journey with confidence.
Before investing, consider the investment objectives, risks, charges, and expenses of the annuity and its investment options. Contact First Command for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
Guarantees apply to certain insurance and annuity products and are subject to product terms, exclusions and limitations and the insurer's claims paying ability and financial strength.
Answer just a few simple questions and — If we determine that you can benefit from working with us — we’ll put you in touch with a First Command Advisor to create your personalized financial plan. There’s no obligation, and no cost for active duty military service members and their immediate families.
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