Annuity Income Riders have been known by many names but in its true essence they will guarantee a lifetime income you and your spouse cannot outlive. Some carriers have fancy names like Guaranteed Lifetime Income Benefit Rider, or Lifetime Withdrawal Benefit Rider but they are riders to annuity contracts and provide benefits in addition to the original contract. These riders do have a cost.

The cost of these Annuity Income Riders can range from .40 of your account value up to .95 of your account value each year. These charges do come with some benefits as they offer guaranteed growth percentages of income account growth. Many annuity brokers will tell clients that these riders offer guaranteed interest as in the terms of cash. This is far from the truth. This credited interest is used only for income, not as in cash value. We would have to agree that the truth is always better than getting caught in a lie or misunderstanding later down the road.

Many fixed indexed annuities all have income rider options at contract inception and are only available at contract inception. In conjunction with an annuity premium bonus, the annuity rider option seems like a really good deal. It is for the right investor with a plan that matches the end of the contract term. It is a great idea for someone that already has other investments that will provide income at retirement and the annuity income rider income is a supplement. It is a great option for those investors that have 6 or 9 months of expenses already in cash reserves in addition to an already determined Social Security Benefit amount.

However, many investors and those close to retirement are really not in that position at all. Many clients that we meet have less saved and come to a stark revelation that no investment tool can save them when it comes to retirement income. Annuities as well as fixed indexed annuities with income riders are a great supplement to an already hearty retirement plan. These income riders do provide income for as long as you live and in some cases as long as your spouse is alive as well. When looking at income options when close or at retirement, you need to consider all of your options which include your pension if any, Social Security income from both you and your spouse. Any rental income from real estate investments which is a whole other subject but should not be used as a serious income source. There are too many factors that affect real estate to consider rental income as a true trustable source of income in retirement.

We believe that annuities and especially fixed indexed annuities with income riders are a great supplemental retirement income source. Not a main source or secondary source, but a third optional safe source of guaranteed income. Too many annuity brokers fail to stress this fact and use these products as a fix all retirement planning option. When using your 401K or IRA as a source, there are many flaws in Modern Portfolio Theory as we all have seen happen to many during the 2008 crisis, but there are options for income from these sources as well.

When looking at these products including annuity income riders, you have to be realistic about what they actually can do for you. There are no other products out there that will still pay you or your spouse even after the account value has reached zero. We believe that is the best selling factor of these products. We hope you found this post useful and made you think about some of your options. As always, we try to post unbiased opinions of products and their features.

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