Thursday, April 14, 2016

How You Can Help Clients Find Financial Confidence for Retirement

The visual picture of retirement is normally laid-back days spent traveling, enjoying hobbies, and being with family and friends. The problem is many people don’t properly plan for retirement and this vision is never achieved. The other issue is companies are moving away from pension plans, so the responsibility of having enough income for retirement is landing largely on the consumer. This is where a financial professional can step in and provide options for helping build a stable financial future for their client.

One option to share with your client is the various types of annuities, as many of them can bridge the gap between money received from pensions and social security and the money needed to handle living expenses during retirement. Fixed indexed annuities can also provide guaranteed* lifetime income and have the ability to accumulate wealth for retirement. It can offer protection against certain risks that could potentially deplete a client’s future savings, as well as provide built-in flexibility in case needs change.

The clients who are able to maintain their standard of living during retirement, have assets for times they may need them, and have the potential to accumulate wealth will most likely be interested in an annuity purchase. This is why many financial professionals often feel confidence when recommending fixed indexed annuities to clients. Of course, they aren’t going to be suited for everyone, but they may be a good fit for those who:
  • Seek to complement other income sources, such as Social Security
  • Are looking to protect premium, while also seeking potential market indexed growth
  • Don’t already have a type of defined benefit pension plan or guaranteed* lifetime income in place
  • Desire a flexible plan that is adaptable to changing needs
  • Looking for ways to convert sums of cash from retirement plans into immediate income
While sharing about annuities, make sure to inform each client about all aspects of the product before making a purchase. Helping them make informed decisions about their future now can help them actually enjoy those hard-earned days during retirement.


*Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank of the FDIC. 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.

Annuities are designed to meet long-term needs for retirement income. They provide guarantees against the loss of principal and credited interest, and the reassurance of a death benefit for beneficiaries. Please note that in order to provide a recommendation to a client about the transfer of funds from an investment product to a fixed insurance or annuity, you must hold the proper securities registration and be currently affiliated with a broker/dealer.  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.

This information is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Encourage your clients to consult their tax advisor or attorney.