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David P. McCabe,
WMCP®, ChFC®, CLU®
Financial Planner
Nathaniel D. High, RICP®
Financial Planner
Nicholas J. Over, CFP®
Financial Planner
Sara E. Martin
Client Relations Manager
Jennifer A. McCabe
Client Relations Specialist
jennifer.mccabe@prudential.com
Centuria Financial Group
2333 Baltimore Blvd Suite B
Finksburg, MD 21048
Phone: 443-952-7232
November/December 2023
Laddering Annuities Can Provide a Steady Income
Are you seeking an investment that provides guaranteed income in retirement? Consider immediate annuities.
The Laddering Strategy
With an immediate annuity*, you receive fixed payouts over several years in exchange for an initial lump-sum payment. However, you may be able to minimize the risk of low returns and take advantage of any rise in interest rates that occurs by laddering annuities.The laddering strategy involves purchasing immediate annuities over several years. So, instead of spending your money on a single annuity that locks you into a lifetime interest rate, you invest in multiple annuities over time. You might buy one annuity a year for four years or an annuity every three years for 12 years, etc. The time frame for staggering each annuity is up to you.
You can also ladder annuities based on the start dates of when you’ll begin receiving the payments.
Laddering Benefits
Annuity payouts are based on money invested, the prevailing interest rate, and the recipient’s life expectancy. So, the older you are when you begin receiving payments, the larger those payments are likely to be. And, if interest rates are higher in later years, you could benefit from using a laddering strategy.The Downsides
Investing a large sum in immediate annuities means you’ll no longer have access to that money. Remember that surrendering an annuity can be costly and difficult if you have an unanticipated expense in the future and need your cash.It’s also important to understand that unless the annuity is a joint lifetime annuity or includes a survivor payout, annuity payments stop at your death.
Food for Thought
If the security of having a guaranteed income appeals to you, consider reviewing laddering strategies. Your financial professional can help you find the right annuity products for your situation.*Annuitants receive a fixed income stream based, in part, on the interest rate guarantee at the time of purchase. Annuity guarantees are backed solely by the claims-paying ability of the issuing life insurance company.
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Centuria Financial Group is not affiliated with Prudential Financial. Centuria Financial Group sells insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies. Centuria Financial Group is authorized to sell and service certain insurance products of Prudential Financial companies as well as use this material. Centuria Financial Group and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Offering financial planning and investment advisory services and programs through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255. Sara E. Martin and Jennifer McCabe are employed by David McCabe and not The Prudential Insurance Company of America or its subsidiaries.
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