Can Your Retirement Income Increase After You Retire?

Many Retirement Income Payments Stay Level

Predictable income can be valuable in retirement. Social Security, pensions, and insurance products may each contribute to a household's monthly cash flow. Many retirement income products, however, are designed to provide a payment that remains level over time.

A level payment can make budgeting easier, but the amount of goods and services it buys may change.

Inflation Can Reduce Purchasing Power

When everyday costs rise, a flat monthly payment may cover less than it did when retirement began. Housing, food, utilities, transportation, health care, travel, and other expenses may all increase over a long retirement.

This does not make level income inappropriate. It means starting income should be considered alongside future purchasing-power needs, other assets, and available flexibility.

Some Riders May Offer Income-Growth Potential

Some fixed indexed annuities offer optional lifetime-income riders that may provide an opportunity for income to increase after withdrawals begin. The way an increase is calculated varies by contract. It may depend on index-linked interest, a benefit base, a declared factor, or another contract provision.

Future income increases are not guaranteed. Some years may produce no increase, and rider charges, caps, participation rates, spreads, withdrawal activity, and other contract terms can affect results.

Fixed indexed annuities are insurance products. They do not directly invest in or participate in a stock-market index. Guarantees are subject to the financial strength and claims-paying ability of the issuing insurer.

The Starting Payment Is Only Part of the Decision

A strategy offering income-growth potential may begin with a different payment than one designed primarily for maximum initial income. The right choice depends on your age, desired starting income, liquidity needs, retirement goals, time horizon, other dependable income, contract terms, and the carrier's financial strength.

Wealth Creative Solutions compares options from multiple leading insurance companies because no single carrier or income design is right for everyone. We examine the potential benefits, limitations, charges, surrender periods, liquidity, and long-term value in the context of your goals.