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Retirement Income

WHAT IS an annuity?

Annuities are financial instruments that you pay into during your working years which then pay you a monthly dollar amount in retirement.  While there are many types of annuities, each of them invests your money and can experience growth over time. 

Think of an annuity as a mule — a cross between a horse and a donkey. They’re a long-term investment but not quite considered pure insurance. It’s a hybrid of both. An annuity is an investment because you give a sum of money in exchange for the hope to gain more than you put in. Annuities are sold by financial institutions, usually an insurance company, and is considered insurance because of the guarantees that annuities offer. These include a guaranteed rate of return for a set amount of years in fixed annuities and a guaranteed rate of return on variable annuities. 

Annuities can provide

Lifetime income
Legacy planning
Tax-Deferred Growth
Long-Term Care Insurance

An annuity is a way to ensure that you have a monthly income during retirement.  

When you leave the workforce, you want to make sure that you have enough money to enjoy your retirement.  After all, you’ve worked hard, made investments, and saved for a great retirement.  Annuities are available to working adults who want to put money away in a growth vehicle today with a guaranteed monthly return in retirement.  They can be funded in a lump sum or in monthly payments.  

2 Phases of Annuity:  Accumulation and Annuitization
2 Phases of Annuity: Accumulation and Annuitization

2 Phases of Annuity: Annuities are divided into two phases.  The Accumulation phase occurs while you are still working and able to fund the annuity.  Depending on when you buy your annuity, this phase could be very short or last several years and even decades until you retire.    The Annuitization phase begins generally in retirement or an agreed-upon year.  In this phase, you can opt to receive the value of your annuity in a lump sum or monthly payments.  Many people choose monthly payouts in order to guarantee that money will be coming in long after they’ve stopped earning income from their job. 

Annuities vs. Life Insurance

Annuities are not life insurance but are for retirement. They are designed to protect against the risk of living too long and running out of money. Life insurance is for premature death and to secure the future of your loved ones by providing a safety net of financial protection.

Steps to retirement income

Step1

Determine How Much Money You Want to Receive in Retirement

Spending time with a member of our Occidental team or a financial advisor can help you determine how much money you want available to yourself in retirement.  Annuities can be funded to provide some or all of your financial needs as you live your golden years.

Step2

Determine the Type of Annuity You Want

There are 5 types of annuities that determine the type of investment growth possible with your money.  A Fixed annuity provides a guaranteed rate of return during the Accumulation phase and is the lowest risk, whereas an Equity-indexed annuity tracks with popular stock indices such as the Dow Jones or S&P 500 and offers greater potential growth and greater investment risk.  There are other options available that we will discuss when we speak with you.

Step3

Compare and Decide

We want you to feel secure about your eventual retirement.  Our team can go over all of the benefits and possibilities of the various annuity solutions available in the market today.  We will go over your retirement plans and help you pick an annuity that works for you.  We have been serving Hawaii for nearly 90 years and look forward to helping you live your best retirement.

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