The Truth About Annuity Income Riders
The Annuity Man
Annuity Income Riders are a popular benefit that can be attached deferred strategies like Variable Annuities (VAs) and Fixed Index Annuities (FIAs). Income Riders should be used for what I call "Income Later" strategies. If you want income to start as soon as 13 months from now to as far out as 20 to 40 years, you should always quote both Income Riders and Deferred Income Annuities (DIAs).
Regardless of what you might be told by an agent, there is not one Income Rider that's better than the others. Income Riders, like all annuity types, are commodities that should be shopped with all carriers in order to find the highest contractual guarantee for your specific situation.
Income Rider values are "monopoly money" and a "phantom account" that can be used to calculate the first lifetime income payment. Remember that lifetime income guarantees are primarily based on your life expectancy at the time the payments start, with interest rates playing a secondary pricing role.
Income Riders can be held in IRA accounts, non-IRA accounts, and Roth IRA accounts. The contractual guarantees are the same regardless of account type.
Most Income Riders come with an annual fee for the life of the policy, with that fee being deducted from the Accumulation Value (i.e. real money/walk away amount) of the policy.
You can contact Stan The Annuity Man if you have any questions or want to see annuity quotes or income rider quotes for your specific situation or to view a live feed of the best MYGA fixed rates for your state of residence.