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Paycheck Chronicles

30 September 2016 Military Pay

Since 1 October 2016 falls on a weekend, the next regular, active duty military payday is Friday, 30 September 2016.  That means that your 30...

Create Your Own Pension

Most Americans are not financial experts and tend to think that income planning is just too difficult and frustrating. Really though, "plan" is not a four-letter word. True, it does take a little time and a little effort, but a thorough plan can help you to provide an income stream to last a lifetime. Imagine living a retirement dream where savings never run out and the money you need to live on just keeps rolling in. Now pinch yourself, because it's not a dream, wake up and discover the world of annuities.

Let's keep it simple, an annuity is just another purchase. In exchange for a sum of money, an annuity guarantees regular payments for the rest of your life. You can choose other amounts of time if you prefer — say 10 years or 20 years, and you can choose to have payments continue to your spouse after you pass away — these are all options open to you based on what type of financial lifestyle you want to buy.

During our working years, we constantly hear how important it is to accumulate wealth and focus on our rate of return. Your objective with an annuity is different — the idea is to ensure you have enough money to live on no matter how long you live — you are now on a spending plan, not an accumulation plan. Once you actually retire, its time to shift your focus and turn assets into income. Basically, you are buying yourself a pension.


Plan Ahead Using a Deferred Annuity

While an annuity is in the accumulation period, the accumulation value (premiums plus interest) will grow as interest is applied. When the annuity enters the payout period, payments distributed from the annuity reduce the accumulation value.

One of the big advantages of a deferred annuity is tax-deferred growth. It allows you to save money on a tax-deferred basis over a period of time and then have those funds paid out to you in the future to support your income needs. Here is an example of the additional growth you can accumulate using this option instead of other taxable investment vehicles.

Accumulation Value of a Tax-Deferred Single Premium Deferred Annuity vs. Taxable Investment

Accumulation Value of a Tax-Deferred Single Premium Deferred Annuity vs. Taxable Investment

This example is based on a $100,000 deposit placed into a deferred annuity and into a taxable account. Both accounts are credited at a rate of 5% for 10 years. A 28% tax bracket is utilized for the taxable account value.

Navy Mutual's offers the benefit of a premium bonus on annuity deposits, which makes the value of the annuity even greater. In this case, the premium bonus of $1,000 is added to the annuity at the time of deposit making the total contribution $101,000.

How Much Can You Pay Yourself?

Another great benefit of an annuity is the guaranteed payout that allows you to plan for the future. This graph provides samples of potential monthly income, based on various distribution periods, of this annuity contract.

Potential Future Monthly Distributions



Tax-deferred interest accumulation and guaranteed rates of return

  • 1% premium bonus
  • No surrender charges, sales fees or commissions
  • Locked-in annuity interest rates guaranteed
  • Competitive market value adjusted interest rates available
  • Guaranteed savings for your future

Interested? Take a look at our Deferred Annuity products. Talk with one of our Membership Representatives today about how Navy Mutual's Deferred Annuity Products can work for you. Call 800-628-6011.

Instant Income Using an Immediate Annuity

Don't want to wait for a deferred annuity to accumulate? Then look to an immediate annuity instead. With this plan, you are purchasing your guaranteed income right now and starting to take the payment immediately. Here is an example of how that plan will work to provide you the guaranteed payments you need, for as long as you need them.

Distribution Potential

Distribution Potential

The monthly payments shown are calculated based on a $100,000 single premium deposit and a guaranteed interest rate of 5% for a 65-year-old male.
An immediate payment plan with a guaranteed stream of income.

  • Guaranteed income for you
  • Numerous payouts options provide you with flexibility
  • No surrender charges, sales fees or commissions
  • Guaranteed level payments

Interested? Take a look at our Single Premium Immediate Annuity today. Talk with one of our Membership Representatives today about how Navy Mutual's Immediate Annuity can work for you. Call 800-628-6011.

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