Certificates of deposit (CDs) are a reliable way of saving money and generating interest income, a method that many retirees take advantage of. In return for holding onto money for a predetermined period of time, banks pay a CD holder a guaranteed interest rate. Generally, longer terms provide higher interest rates than shorter terms. Retirees can receive income by withdrawing the interest generated each month. This income generation works like a monthly paycheck, except you are paying yourself. While a CD or a series of CDs are a perfectly respectable way of saving money and generating income from interest earnings, there is a way to almost double the income provided by a bank CD. By combining CD income with income from a retirement annuity, (commonly called an immediate annuity) you can make your money work harder for you. Retirement annuities are similar to CDs in that they are a stable way to generate a guaranteed income stream. One of the primary differences is that CDs are issued by banks and retirement annuities are issued by insurance companies.

Let’s say you hold a $300,000 CD that pays you $785 in monthly interest income, assuming a 4.45% rate of return. When the CD matures, you can split the $300,000 into one $150,000 retirement annuity with a monthly payout of approximately $1000, depending on the rate of return, your life expectancy, and your gender. The remaining $150,000 can be left in the CD to generate additional interest income of about $392.50, or it can be invested elsewhere to reap larger interest gains.

Earning more income, safely, from the same amount? Sounds too good to be true, but it’s not. Contact the Annuity Specialists today at 1-800-998-4056 to learn more about maximizing income with a retirement annuity.