GRIP RETIREMENT SM, LLC
Home Up About Us Search Site Map Contact Us
Inflation Protection
A Guaranteed Retirement Income Program for pension and qualified rollovers.
 Single Life Joint Life Period Certain Income Refund Annuity Inflation Protection Deferred Start Medically Underwritten  

 

Using the Cost Of Living Adjustment and Consumer Price Index (CPI) against inflation!
If you are concerned that the purchasing power of your fixed income payments will decline due to inflation, you might want to consider selecting an Inflation Adjustment option.

Cost of living adjustment - COLA
This is an immediate annuity with payments that increase by a set percentage each year. The annual increase can range from 1% to 7%. However, initial benefits will be lower than non-COLA immediate annuity. Put simply a $1,000 per month income with a 3.00% compounding COLA would be $1,030 in year 2, $1,344 in year 10 and $1,806 in year 20. The longer you live the more attractive this feature becomes.

CPI-U inflation adjustment - (Consumer Price Index)
Currently available on qualified rollovers only.
Our fixed immediate annuity with inflation adjustments is tied to the Consumer Price Index (CPI-U), which enables you to receive an inflation-indexed stream of income that is guaranteed* for life.
Your income payments will be adjusted each year on January 1st to correspond with changes in the non-seasonally adjusted Consumer Price Index - U ("CPI") published by the Bureau of Labor Statistics. These adjustments can either raise or lower the payments for the next year, depending upon changes in CPI-U.
As illustrated in the table below, the maximum annuity income payment increase permitted in any single year will be limited to 10% (Year 7). As added protection, any decrease will never reduce the payment below the initial benefit amount (Year 3). Because of this guaranteed minimum payment level, any negative movements in CPI which are not applied to the Annuity Income amount will be used to offset future CPI increases (Year 4).

SAMPLE ADJUSTMENT

The table below is based upon an initial monthly payment of $500.00. Increases or decreases in the movement of the CPI-U Index** are reflected in the second column. The third column represents the adjustments made to the monthly payments every January 1st, and illustrates how payments never fall below the initial premium (floor), excess declines are applied (offset), and how increases are limited to 10% (cap) in any single year.

Year

 Change in CPI index Change in modal payment Modal payment amount
1     $500.00
2*** + 2.4% + 2.4% $512.00
3 - 3.4% - 2.4% (floor) $500.00
4 + 4.2% + 3.2% (offset) $516.00
5 + 3.7% + 3.7% $535.09
6 + 6.2% + 6.2% $568.27
7 +12.1% + 10.0% (cap) $652.09
8 + 6.9% + 6.9% $668.22
9 - 1.2% - 1.2% $660.20
10 + 1.9% + 1.9% $672.74
bullet * Guarantee is based on claims-paying ability of insurance companies that issue the annuity.
bullet ** Changes in CPI Index are for illustration purposes only and do not reflect the actual index changes for any specific time period.
bullet *** First January Payment adjustment will be prorated based upon the date of annuity purchase.

For illustration purposes only/not for distribution.

 

[ Home ] [ Up ]

Send mail to annuity@earthlink.net with questions or comments about this web site.
Copyright © 2005 GRIP Retirement LLC
Last modified: 04/08/08