- Income annuities are insurance contracts designed to pay back not only a return on investment but also a portion of the original proncipal with each payment. The payout occurs over your life expectancy, but if you live longer, you continue to receive payments. What this means is that retirees who need a nest egg of lets say $ 1 million can live the same lifestyle with as little as $...600,000 in an income annuity.Put another way, $1 million in an annuity will currently generate $86,000 a year in income for a healthy 65 year old male. While the same amount invested in a traditional securities portfolio would currently generate between $40,000 and $50,000 annually depending on the withdrawl rate...No wonder the Federal Government is now pushing annuities for the baby boomer retirement portfolios!! This news can offer hope for millions of workers about to retire with inadequate retirement savings. As I stated at our BPM last week, when it comes to annuities vs securities, annuities will get you to the finish line quicker and risk free.
