Union of Poles in America -EXAMPLES

EXAMPLES OF HOW THE PAY-OUT PERIOD WORKS

What options are available to a 65-year old man who has saved $10,000? He can buy a Certificate of Deposit and receive perhaps, $550 per year. Or, he can purchase a bond and perhaps get $650 per year.

If he had instead invested in an UPA annuity (or even if he starts his investment when he retires!), he could receive $860.40 per year, based on the life-only option.

(This rate of converting the $10,000 may change at the Board’s discretion, but once the payments begin, the payment level is locked in.)

How can UPA give so much more than a Certificate of Deposit? The annuity basically whittles away at the initial investment, until nothing is left when the annuity pay-out period is over (death of Member, end of Years Certain period, or death of Member and spouse). There is no inheritance to pass to the children (expect in the Years Certain option). Instead, the Member is using his investment to provide him with a constant flow of money while he lives.

ADVANTAGES

The Member knows that he will be getting a monthly allowance for his lifetime, or for the lifetime of himself and his spouse.

He does not have to worry about dipping into the principal of the Certificate of Deposit.

He does not have to worry about fluctuations in the stock or bond markets.

He does not have to worry that he will run out of money if he grows very old.

DISADVANTAGES

Once the annuity pay-out starts, it cannot be cashed out for any circumstances.

If a big bill comes due, there is no reserve to draw from.

If the Member dies suddenly, and did not elect a Joint and Survivor option, the surviving spouse does not receive any payments beyond the Years Certain period, if any.