3-minute article

How fixed indexed annuities are uniquely designed for today’s retirement challenges

Today’s retirees are facing a long list of challenges, from increasing lifespans and health care costs to market volatility and inflation. These factors can weigh down confidence as people try to plan for their financial futures. In a survey by Bankrate.com, over 70% of American workers reported feeling behind or unsure about their retirement savings.

Building a resilient, sustainable retirement income plan is more important than ever, and fixed indexed annuities (FIAs) can help. In addition to a guaranteed retirement “paycheck,” an FIA  provides growth potential along with protection from loss due to market downturns.

Guaranteed retirement income
Adding an FIA to a retirement portfolio can provide a guaranteed stream of income to supplement Social Security benefits, pensions or other income sources. Together, these income sources can help meet the challenge of a potentially longer life and lengthy retirement.

Flexible planning to meet future costs
Allowing for unexpected costs is just as important as covering the planned day-to-day costs of living when planning for a financially secure retirement. On top of mortgage debt and other planned expenses, many retirees will face rising health care costs throughout their retirement. The compounding effect of rising health care inflation means the total lifetime out-of-pocket costs for a 65-year-old couple retiring now are projected to be $606,337. The guaranteed income from an FIA can help cover health care and other unplanned, but essential expenses, decreasing the risk of running out of money in retirement. Having guaranteed income streams in place can help people adjust or reallocate funds as their goals and needs change.

Growth potential, downside protection
As the events of recent years remind us, market conditions can be unpredictable and we never know if a rise or a fall is around the corner. People nearing retirement may want to shift to a strategy that balances growth and principal protection. FIAs offer the opportunity for returns tied to the performance of a stock market index without direct exposure to the risks of the stock market or individual stocks. They also guarantee protection from loss due to market downturns.

As a long-term financial product, an FIA may offer more accumulation potential than other safe-money strategies and allow people to ride out market volatility with more confidence. Additionally, with the security and predictability an FIA can bring to a retirement portfolio, clients may feel comfortable pursuing other investment opportunities more aggressively.

Navigating the challenges of retirement is no easy task, but with proper preparation and a diverse, resilient income strategy, your clients can achieve the financial future they’ve always envisioned.

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