Split-Funded Annuity Definition

(Many of the links in this article redirect to a specific reviewed product. Your purchase of these products through affiliate links helps to generate commission for LiveWell, at no extra cost. Learn more)

Unlocking the Power of Split-Funded Annuities

Are you looking for a financial strategy that can provide both income stability and growth potential? Look no further than split-funded annuities. This unique financial product offers a combination of immediate and deferred annuities, providing you with the benefits of both worlds. In this blog post, we will dive into the definition of split-funded annuities and why they might be a valuable addition to your financial portfolio.

The Definition of Split-Funded Annuities

So, what exactly is a split-funded annuity? At its core, a split-funded annuity is a financial product that combines the features of immediate and deferred annuities. Let’s take a closer look at each component:

Immediate Annuity:

An immediate annuity provides a guaranteed income stream, typically starting immediately or within a short period of time after the annuity is purchased. This type of annuity is best suited for individuals who want a secure and reliable income source in retirement.

Deferred Annuity:

A deferred annuity, on the other hand, allows you to accumulate assets over time and defer the start of the income payments. This option is ideal for individuals who want to grow their retirement savings and potentially increase their income in the future.

Now here comes the interesting part. A split-funded annuity allocates a portion of your initial investment to an immediate annuity, which provides you with immediate income. The remaining portion is invested in a deferred annuity, allowing it to grow and potentially increase your future income stream. This unique combination helps to strike a balance between income stability and growth potential.

Why Consider Split-Funded Annuities?

Still not convinced if split-funded annuities are the right choice for you? Let’s delve into some of their key benefits:

1. Income Stability:

By allocating a portion of your investment to an immediate annuity, you can create a steady stream of income that you can rely on throughout your retirement. This can provide peace of mind, knowing that you have a reliable source of income to cover your living expenses.

2. Growth Potential:

With the remaining portion of your investment allocated to a deferred annuity, you have the opportunity for growth and potential income increases down the road. This allows you to benefit from market gains and increase your income as your retirement progresses.

Another advantage of split-funded annuities is their flexibility. Depending on your financial goals and circumstances, you can adjust the percentage allocated to immediate and deferred annuities to meet your specific needs.

Split-funded annuities are just one of the many financial tools available to help you secure your financial future. By combining the features of immediate and deferred annuities, they offer a unique and well-rounded approach to retirement planning. So, why not explore the power of split-funded annuities and unlock their potential for your financial portfolio?