Any guarantees made by an insurance company are subject to the financial strength of the insurance company and their claims paying ability. Additionally, each state does have its own guaranty fund, but it should not be thought of as a substitute for FDIC insurance, which annuities do not have. State guarantee fund rules vary significantly state-by-state. You can find more state specific information here.
Some fixed annuities (generally those paying the highest rate) do not allow for any withdrawals during the guarantee term without a surrender charge. Surrender charges vary, but can be as high as 9% in year 1 and typically decline by 1% per year (and are 0% at the end of the guaranteed rate period). Other fixed annuities allow for penalty-free withdrawals of interest earned. However, this is sometimes restricted in the first year. Still other fixed annuities allow for withdrawals of up to 10% per year of the beginning balance at the start of the year. At Blueprint Income, we lay out plainly, product by product all charges and options associated with a withdrawal. See them and filter by withdrawal allowances for fixed annuities here.
Retirement income is the “salary” you receive once retired. The traditional sources of retirement income are Social Security and pensions, both of which are guaranteed to last for life. Annuities provide supplemental guaranteed retirement income. In addition, you can generate retirement income (that isn’t guaranteed) by withdrawing from the assets you accumulated over time (think 401(k), brokerage and savings accounts).
What makes an annuity an annuity is its ability to provide guaranteed, lifelong income in retirement. Some annuities exist to do only that, while others have that as just an option. The former (provides income and income only) is called an income annuity. There are three types of income annuities:
The other type (has the option but not requirement) to provide income is known as a deferred annuity. There are three types of deferred annuities:
Blueprint Income offers all types of income annuities, as well as fixed annuities.
An immediate annuity, a.k.a. single premium immediate annuity or SPIA for short, is the simplest annuity product on the market. It’s purchased by people retiring within the next year or already in retirement. For a given amount of money paid upfront today, you receive a set amount of monthly income starting within one year that lasts as long as you live.
A longevity annuity, a.k.a. deferred income annuity or DIA for short, provides lifetime income starting 2-40 years from now. Money is paid upfront, but the income payments you receive are delayed for a period of 2-40 years. Because of the deferral, you will receive higher monthly income as compared to an immediate annuity. Longevity annuities can be good for people who want income starting years in the future.
A Qualified Longevity Annuity Contract, or QLAC for short, is a special type of longevity annuity. The QLAC is a way to purchase a longevity annuity using your qualified retirement savings (such as from an IRA or 401(k) rollover) but delays the start of that income to after age 72. It’s given this special designation because it overrides the IRS required minimum distribution (RMD) rules.
A fixed annuity, also known as a multi-year guaranteed annuity (MYGA), provides a guaranteed rate of return for a predetermined period of time. It is most similar to a Certificate of Deposit (CD) that is offered by a bank or other-FDIC insured institution, except that it is offered by an insurance company. When compared to CDs, fixed annuities offer higher guaranteed crediting rates over longer time horizons (2-10 years), tax-deferred growth, the ability to annuitize upon maturity, and liquidity via penalty-free partial withdrawals for those 59½ or over.
The average American is living longer, which means that your savings have to last longer too. At the same time, the decline of pensions has made it harder to be financially prepared for retirement. Preparing for retirement with just savings exposes you to market volatility and risks, i.e. your investments might lose value and/or you might live longer than you expect. Guaranteed retirement income — like pensions and annuities — mitigates both of these risks.
The paperwork we provide the insurance company includes a “request for transfer” form. This form is then sent from the insurance company to the financial institution holding your money, which initiates a transfer from your account to the insurance company. This process takes 2-4 weeks.
You don’t pay us, the insurance companies do! Blueprint Income is paid 1-5% of the income annuities purchased through our online annuities marketplace.
Insurance companies collect financial information, such as your income, expenses, assets, and net worth, from those interested in purchasing annuities. They use this information to ensure that an annuity makes financial sense for someone. Specifically, since it is illiquid, the insurers want to see that individuals have enough liquid assets outside of those being used to fund the annuity.
The taxes you’ll pay on annuity income depend on how you funded the annuity: you have the option of using retirement or non-retirement savings, called qualified or non-qualified, respectively. To learn more about taxes owed in retirement, head to this article.
Blueprint Income is not a tax advisor and we encourage you to speak with your tax professional about the potential tax ramifications the sources of your retirement income.
Your annuity is 100% backed by insurance companies. As such, you are guaranteed the income generated by the contributions you’ve made independent of our existence.
Blueprint Income is currently located in the Seaport District of Boston, Massachusetts. We serve clients all over the United States.
Blueprint Income was founded by three Wharton Business School classmates: Matt Carey, Nimish Shukla, and Adam Colombo. Matt came up with the idea for Blueprint Income during his time at the U.S. Treasury, where he advised senior U.S. officials on the future of retirement. Prior to Blueprint Income, Nimish spent time advising companies on M&A, capital markets and financing transactions at Stifel Bank. While working at PayPal and BlackRock, Adam saw how he could apply his engineering skills could help solve big societal challenges.
Blueprint Income believes that everyone should have financial security during retirement and that there is a simpler and easier way to plan for retirement. That’s why we’re providing easier access to annuities, to help people achieve guaranteed retirement income.
If an insurance company goes out of business state agencies work to protect customers and ensure that the maximum amount of claims are paid out. Each state has varying maximums so it’s important to know what these limits are.
For income annuities which provide a lifetime guarantee of income, Blueprint Income only offers products from insurance companies with an A.M. Best rating of A or higher. For fixed annuities with shorter-term guarantees of 3-10 years, Blueprint Income offers products from insurance companies with A.M. Best ratings of B or higher.
The stronger the rating of an insurance company, the more likely it is to repay any outstanding claims it has. Accordingly, an insurance company with an A++ rating has consistent financial performance, a strong corporate and managerial structure, and credible payment history.
Independent agencies, such as A.M. Best and S&P, rate the financial strength of insurance companies on a scale from D to A++. The rating indicates the credibility and ability an insurance company has to repay any claims to customers.
Blueprint Income offers annuities from top-rated insurance companies with long histories of financial strength. We are continually cultivating our relationships with insurance companies and only work with those whose mission aligns with Blueprint Income.
Blueprint Income offers annuities from 30+ insurance companies, including Guardian, MassMutual, Pacific Life, Lincoln Financial Group, Mutual of Omaha, Protective, Minnesota Life, Western & Southern, and more.
Unless you choose otherwise, your income annuity comes with the Refund at Death feature. With it, you are promised that any money you contributed and haven’t received back will be given to your beneficiary.
A 401(k) is a tax-advantaged retirement savings account provided by your employer, who typically matches a percentage of the contributions you make directly from your paycheck. 401(k)s are typically available with both Traditional IRA (tax-free in; taxed out) and Roth IRA (after-tax in; no taxes out) statuses. The money you and your employer contribute to your 401(k) can be invested in the stock and bond markets.
An IRA is a tax-advantaged personal retirement savings account (away from your employer). A Traditional IRA accepts pre-tax money and withdrawals are fully taxed as ordinary income. On the other hand, a Roth IRA accepts post-tax money and withdrawals are tax free. The money you save into your IRA can be invested in the stock and bond markets.
Yes! Our online annuities marketplace offers both income and fixed annuities from top-rated insurance companies.
Your money is invested conservatively in the insurance companies’ General Accounts, largely in fixed income investments as well as in some equities. Importantly, they take on all of the investment risk. So if the markets underperform, it’s on them. Not you.
An annuity is a form of insurance that protects your longevity. When you purchase an annuity you pay an insurance company, who invests your money, and promises to pay you a fixed and guaranteed amount of income starting on a future predetermined date and continuing for the rest of your life.