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What’s in your clients’ financial forecast?

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Planning for retirement is like planning for a cross-country trip. There’s lots of excitement asking, “What will I do?” and “Where will I go?” There are also the inevitable questions of “What will the weather be like?” and “How do I plan for the possibility of rain, snow and temperature change along the way?”

Image of laptop computer with white hands on the keyboard and an image of an infographic on screen.

This infographic can provide a simple way to start a conversation about uncertainty that may affect your clients’ financial forecast, as well as a possible solution to minimize the impact.

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Popularity of a new “all-weather” asset class

While planning for the weather may require many options, planning to manage financial risks has gotten easier with a new type of annuity. Because it provides a structured return linked to an underlying index and a buffer for protection, it is often described as a buffered annuity, variable index annuity or registered index-linked annuity (RILA). Here’s a simple example of the benefits it provides:

Bar chart showing how growth potential, downside protection and risk of loss compare among three types of investments, namely, fixed income, a registered index-linked annuity and equities. The fixed income investment shows the lowest risk of loss and the lowest growth potential. Equities have the highest risk of loss and highest growth opportunity. The registered index-linked annuity has growth potential that is higher than fixed income and lower than equities. Its risk of loss is similar to equities, but part of the loss is protected by a buffer that absorbs a portion of market loss.

A RILA can be seen as an all-weather tool because it: 

  • Provides growth potential and a level of protection from market risk when interest rates are low
  • Provides increased growth potential when interest rates rise
  • Helps securely get assets to retirement by managing market volatility and sequence of return risk

Learn more about how RILAs work and the value they add in this whitepaper from Athene, authored by Wade D. Pfau, Ph.D., CA, RICP.  

Learn more

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