Episode #26: Using the Allianz Core Income 7 and Its Benefit Rider to Close the Income Gap

Episode #26: Using the Allianz Core Income 7 and Its Benefit Rider to Close the Income Gap


Planning for retirement income can be complicated. With expenses such as food, housing, health care, and taxes, you will typically find yourself with an "income gap" where the amount of money coming in just isn't enough to cover those core expenses.

With the Allianz Core Income 7® Annuity, you have the opportunity to receive principal protection against market downturns, potential indexed interest, and the potential for tax-deferred growth. And with its built-in benefit rider (at an additional cost), it can help close the income gap between your expenses and income. In this episode of Money Script Monday, Sean reviews the benefits of the Allianz Core Income 7® Annuity and shows you how it can help make retirement income planning a bit simpler.


 

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Video transcription

Hello, and welcome to another edition of "Money Script Monday." My name is Sean Brady, and today, we're going to be using the Allianz Core Income 7® and its Benefit Rider to close the income gap.

Now, it takes a lot of preparation to grow a successful garden. You need a long-term vision, you need some seeds to sow, and you need some tools to tend to the garden, and most importantly, you need time.

And the same thing can be said about retirement planning.

You need a long-term strategy to help lay the groundwork for that income that covers your core or basic expenses. Those expenses are things like:

  • Food
  • Housing
  • Health care
  • Taxes

Traditionally, we looked to sources like Social Security and savings to cover these expenses. The problem with this traditional approach to retirement savings is that it doesn't always consider that we're living much longer than we used to, and people really run the risk of outliving their retirements.

Even when we save enough for retirement, during a very long retirement, that income that we've been receiving doesn't always keep pace with inflation. And people are starting to realize and feel that income gap between the income that they've been receiving and the actual expenses that are coming to fruition.

People are expecting a certain level of comfort in retirement, and if their income that they're receiving isn't outpacing inflation, then it might not be the retirement they've been expecting.

And that's one of the reasons why you should consider the Allianz Core Income 7® and its Core Income Benefit Rider, which comes on at an additional cost.

Now, it is a fixed index annuity (FIA). And simply put, an annuity is a contract between you and the insurance carrier that's designed to help you achieve your long-term financial goals.

In exchange for your purchase payments, Allianz is going to give you benefits and guarantees which include:

  • Tax deferral
  • Accumulation potential
  • Income at a future point down the road
  • Death benefit for beneficiaries

Indexed interest growth potential

A fixed index annuity (FIA) can enjoy indexed interest growth potential based on changes on an external index benchmark.

Indexed interest potential of a fixed index annuity

Your principal is protected in this. So, you don't have to worry about risk in terms of market declines or losses. The annuity has a straightforward design with one value, annual point-to-point crediting, and a seven-year declining surrender charge.

And as with all indexed annuities, you experience tax deferral. Tax deferral, meaning, you can experience that retirement account accumulating much faster than normal.

Lifetime income withdrawal percentages

Let’s get into what makes the Allianz Core Income 7® unique in this annuity space. First, it's the lifetime income withdrawal percentages.

Lifetime income withdrawal percentages of Allianz Core Income 7

This is one of those annuities that rewards you for waiting when you're saving for retirement. Beginning at age 45, you experience guaranteed increases every single year to your withdrawal percentage.

Now, a higher withdrawal percentage means higher income. Also, you don't have to wait to start your income. You could start as early as age 50, or you could postpone it to a later date.

The point is, is that the choice is yours.

Guaranteed lifetime withdrawals

Lastly, when you're getting ready for that distribution phase, the Allianz Core Income 7® also offers guaranteed lifetime income withdrawals and gives you two different options.

Guaranteed lifetime withdrawals of Allianz Core Income 7

Option 1: Dependable Income for Life

Option one gives you that dependable income for life, and that's if you are a person that wants that predictable payment where the payment's always going to be the same, it's gonna last your entire lifetime.

Option 2: Income for Life – Plus an Opportunity for Income Increases

But we also have the benefit of option two, if you'd like to choose. You get that same income for life, plus an opportunity for income increases.

You’re going to start off with a smaller payment upfront in the beginning years, but anytime your policy earns interest based on the selection that you've allocated to, your income increases as well.

Which is guaranteed to never go down when there's a market decline or market loss.

And this can be really powerful in long-term retirements where you can maintain that lifestyle you've been living and maybe even outpace inflation.

The great thing about these two options is that you don't have to choose them right off the bat. You can wait several years, and when you're ready to take those distributions, you could choose the option that makes the most sense to you.

This is just a high-level overview of the Allianz Core Income 7® and the Core Income Benefit Rider, and how it can help you accumulate for retirement, as well as cover those core and basic expenses throughout retirement no matter how long your retirement is.

If you have any additional questions, I urge you to use the contact information on this page and reach out to us.

That concludes today's presentation. Thank you for watching and we'll see you next time on "Money Script Monday." Thanks.

Additional resources

About Sean Brady

Sean Brady is an Advanced Case Designer at LifePro. He works with financial professionals designing advanced case illustrations that are built for longevity and are always in the best interest of the client.

Disclaimer

This information is meant for educational purposes only.

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