Forbes: "Why Annuities are Healthy for Retirees"
Forbes recently released an article titled "Why Annuities are Healthy for Retirees". You can read the full article at this LINK
3 Key Facts
1. Managing retirement income from a lump sum can cause immense stress - annuity payments solve that.
2. Annuity owners prioritize their health - this leads to happier, healthier retirements.
3. Defined benefit plans are far less common for today's retirees than in their parents' and grandparents' generations - annuities allow them to have their own "defined benefit".
We previously highlighted the mathematical benefits of incorporating annuitized income in a client's portfolio HERE Forbes focuses on the emotional and physical health benefits of retirees who have annuitized income.
There are plenty of takes on what the best way is to generate income in retirement... The 4% rule, using a guardrails approach, or withdrawing interest and maintaining principal. These can all be viable solutions, but sometimes keeping client psychology in mind is the best way to help retirees live their dream retirement and stay retired!
Spotlight Client Solution*
7.50% Immediate Income at Age 65
For a 65 year old to deposit $100k and generate $7,500 of income each year until they're 90, they'd need to earn a net average return of 6.38% each year for 25 years. It's possible to invest the money and do that, but there are several insurance companies that will guarantee it.
Using annuitized income to cover a portion of a retirees' fixed income can benefit their portfolio and their health in several ways:
Mitigating sequence of return risk
Better long-term portfolio outcomes if remaining assets are invested more aggressively
Alleviates retirees' #1 fear - running out of money
Gives retirees extra confidence to take the trip or buy the car
Notable Client Solutions*
6.20% for 7 Years
Ibexis is the go-to for clients who are RMD age or want to withdraw interest annually.
• 0.60% higher than the next A rated carrier.
• $4,200 extra interest withdrawn while maintaining principal on a $100k deposit.
8.50% Guaranteed S&P Cap
MassMutual Ascend's Legend 7 is a go-to for cash growth FIAs.
• S&P annual cap guaranteed at 8.50% for all 7 years of the surrender schedule.
• 10% liquidity available each year.
• A++ rated insurance company
*Rates may be subject to premium banding. Products may not be available in all states. Replacement must be suitable and meet all requirements.