Why Use a Variable Annuity to Fund a Qualified Plan? 

 

Major studies have found that Americans are seriously under-funding their retirement accounts, saving at most only 1/3 of the amount they will eventually need.  But retirement saving is just one side of the coin.  Positioning your client's assets to provide income during retirement is equally critical.  Without careful planning, retirees can face the very real problem of running out of money before they run out of time.  An annuity can help to solve this dilemma by guaranteeing payments for the rest of your client's life no matter how long that may be.
 

No one can predict if they will die when the market is up or down.  The guaranteed death benefit of an annuity gives the investor the confidence to invest in the stock market, which is important to keep pace with inflation, since they know that their family will be protected against a financial loss in the case of an untimely death.
 

The number of investment options open to annuity investors continues to rise with nearly half of all annuities offering 30 or more investment accounts.  This clearly benefits investors by giving them access to many of today’s top money managers within one investment vehicle as opposed to incurring the expense of a brokerage account to diversify risk across several investment managers.
 

Based on data provided by Lipper Analytical Services, the total cost differential between variable annuities and mutual funds was only 67 basis points, or about 2/3 of 1%.  This is because the underlying investment accounts in variable annuities generally impose lower fees than publicly offered mutual funds, and those lower expenses offset, to some extent, the insurance charges.
 

Living benefits offer a minimum guarantee to help protect investors’ financial futures from market downturns.  There are Accumulation Benefits, Income Benefits and Withdrawal Benefits all available to help the investor design an appropriate plan.
 

Why use a variable annuity to fund a qualified plan?   Because only variable annuities offer a unique combination of benefits that most retirement focused Americans want and need: lifetime income payments, family protection, guaranteed fees, investment options and strategies that help protect against inflation and optional living benefits.

Call us for more information about the above, or other services which we may help you with.