Read Time:
4-minute
article
Discover a different approach to growth as retirement nears
This content is categorized as:
Market swings hit differently when retirement is on the horizon. What once felt like normal ups and downs can start to feel more personal when the timeline is shorter and the stakes are higher.
If you’re in your 40s or 50s, you might be starting to question how to keep growing your retirement nest egg without being fully exposed to market swings. That’s where a more balanced approach comes in.
Why growth still matters, but risk feels different
Even as retirement gets closer, growth remains essential. Inflation, longer life expectancies and rising costs mean your money still needs to work. But timing matters more now.
A significant market loss just before or early in retirement can create what’s known as sequence-of-returns risk. Early losses reduce the amount of money available to recover, which can affect your long-term income.
That’s why many Gen Xers are looking for ways to balance growth and protection.
A different approach: growth with guardrails
As you rethink how to balance growth and risk, the goal isn’t to eliminate market exposure but to manage it more intentionally.
That’s where solutions designed with built-in protection features can come into play. One example is annuities, which offer a range of approaches to help keep your money working while limiting downside exposure.
These options provide varying levels of protection and growth to align with goals and risk tolerance.
Here’s how three common types of annuities work:
| Annuity type |
How it works |
May be a fit if... |
| Multi-Year Guaranteed Annuities (MYGAs) |
- Guaranteed, fixed interest over a defined period
- No exposure to market risk
- Tax-deferred growth, which can enhance long-term accumulation
|
If you have low tolerance for risk,, MYGAs can provide steady, dependable growth. |
| Fixed Indexed Annuities (FIAs) |
- Interest credits linked to a market index, like the S&P 500
- Full protection from loss due to market downturns
- Upside potential, typically with limits
|
If you want growth potential but are concerned about downside risk as retirement approaches, explore why FIAs may be a strong option. |
| Registered Index-Linked Annuities (RILAs) |
- Higher growth potential than more conservative options
- Partial downside protection through features like buffers or floors
- Some exposure to market losses, within defined limits
|
If you’re comfortable taking on a measured level of risk in exchange for greater upside opportunity, RILAs can offer a more flexible middle ground. |
How do these compare to other options?
If you’re weighing annuities against options like bonds or CDs, here are a few key differences:
| Feature |
How it may apply |
| Tax deferral |
Annuities allow your earnings to grow on a tax-deferred basis, which may enhance the benefits of compounding over time. If held in qualified accounts, CDs and bonds can be tax-deferred. |
| Downside protection options |
Certain annuities offer features designed to help limit exposure to market downturns. CDs offer full protection from market downturns. Bonds offer some as well. |
| Flexible risk levels |
From guaranteed fixed interest rates, like MYGAs, to varying levels of market exposure, like RILAs, you can choose an approach that aligns with your comfort level. |
| Planning objectives |
CDs are often used for shorter-term financial goals, while fixed and fixed indexed annuities are generally designed for longer-term financial objectives. |
This flexibility can make annuities useful across different life stages. Not just at retirement, but in the years leading up to it.
Matching your strategy to your stage
Your ideal mix of growth and protection may evolve over time.
Growth and protection may shift as retirement gets closer
As retirement approaches, your strategy may move from seeking growth toward helping preserve what you’ve built.
40s
Late 40s
Early-to-mid 40s
Primary focus
Prioritize growth while managing risk.
Potential approach
Consider solutions like FIAs or RILAs to pursue growth with defined protection features.
50s
Near retirement
50s to early 60s
Primary focus
Shift toward more protection.
Potential approach
Consider MYGAs or more conservative allocations to help preserve gains.
Key idea: Your strategy can evolve as retirement gets closer — from pursuing growth to helping protect the savings you’ve built.
The key is finding a balance that lets you continue growing your savings without exposing yourself to risks that could derail your retirement plans.
A more balanced path forward
You don’t have to choose between growth and protection. By incorporating annuities into your broader retirement strategy, you can create a more balanced approach that helps you:
- Continue building wealth
- Reduce exposure to losses
- Stay on track as retirement gets closer
You don’t have to choose between growth and protection.
Take the next step
If you’re looking for ways to help grow your savings while managing risk, it’s worth exploring solutions designed for both.
Learn more about annuity options that support protected growth.
Want the most from your retirement? Get smarter with Smart Strategies from Athene. Your source for tips, tools and financial solutions that can help you live your best life.
Indexed annuities are not stock market investments and do not directly participate in any stock or equity investments. Market indices may not include dividends paid on the underlying stocks and therefore may not reflect the total return of the underlying stocks; neither an index nor any market-indexed annuity is comparable to a direct investment in the equity markets.
