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As
more companies do away with defined benefit pension plans, it is left as the
responsibility of individuals to ensure that they have enough income for
retirement. While many people may fear outliving their savings, other
threats to both long- and short-term retirement incomes can include:
- Inflation
- Market uncertainty
- Medical expenses
Longevity
only magnifies these risks, as living to an older age means that these risks
must be managed for a longer period of time. Because of this, many consumers
over the past few years have been turning to income producing products, as
these insurance vehicles can allow them a guaranteed* incoming cash flow,
oftentimes without regard to market performance, or even surrounding economic
issues. This has recently led to strong sales of fixed indexed annuities
(FIAs), deferred income annuities (DIAs), and single premium immediate
annuities (SPIAs).
Some
of the clients that these products may be well suited for can include those
who:
- Are seeking to compliment other income sources such as Social Security
- Do not have any type of guaranteed* income or defined benefit pension plan in place
- Are risk-averse and are seeking to protect the premium, while at the same time seeking market indexed growth
- Are looking for a way to convert large sums of cash from retirement plans into immediate income
Although
all clients’ situations are unique, the benefits that are offered through these
products can cover a variety of different needs. By not having these vehicles
available, it is possible that you might be leaving the door open for clients
to go elsewhere to take care of their retirement income needs – possibly taking
other business with them in the process. But, by becoming familiar with how
FIAs, DIAs and SPIAs can provide growth, and protection of premium, client
portfolios and long-term client relationships can be strengthened.
Contact Partners
Advantage Annuity Brokerage Team
for More
Information and Complete Product Assistance:
888-251-5525, Ext.
709
*
Guarantees are backed by the financial strength and claims-paying ability of
the issuing company. Annuities are designed to meet long-term needs for
retirement income. They provide guarantees against the loss of premium and
credited interest, and the reassurance of a death benefit for beneficiaries.
Any distributions may be subject to ordinary income tax and, if taken prior to
age 59½, an additional 10% federal tax. Early withdrawals may result in loss of
principal and credited interest due to surrender charges.
Partners
Advantage Insurance Services and its representatives do not give legal or tax
advice. Consult your tax advisor or attorney for legal or tax advice.
A fixed
indexed annuity can provide annuitization as a means to provide retirement
income payments. An alternative option to annuitization could be the purchase
of an optional lifetime income rider, a benefit for which an annual premium is
charged.
Please
note that in order to provide a recommendation to a client about the
liquidation of a securities product, including those within an IRA, 401(k) or
other retirement plan, to purchase a fixed or variable annuity or for other
similar purposes, you must hold the proper securities registration and be
currently affiliated with a broker/dealer or registered investment adviser. If
you are unsure whether or not the information you are providing to a client
represents general guidance or a specific recommendation to liquidate a
security, please contact the individual state securities department in the
states in which you conduct business.
FOR
FINANCIAL PROFESSIONAL USE ONLY. NOT FOR USE WITH CONSUMERS.
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