Thursday, June 23, 2016

Providing More Retirement Income Options for Your Clients

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.