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Retirement Planning > Spending in Retirement > Income Planning

Which income rider is the best?

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With so many insurance companies offering income riders on indexed annuities today, it can be difficult to figure out which is best for each and every client of yours. Though no two clients are the same, thousands are buying today’s FIA solutions for the purpose of guaranteed income for life.

For these clients, it is extremely important that you do your research and find out which product will give them the most income. Therefore, it’s vital that you know how much income your clients may be giving up with your recommendation.

The best product
I work with some of the top advisors in the country, many of whom are focusing on income planning in retirement. Recently, an advisor asked me what our best product currently is. Here’s the problem. We offer FIAs from more than 20 of the top carriers, with most of the companies offering anywhere from six to 10 different prod-ucts. That’s 120 to 200 different products to sort through. After working with advisors for six years, I’ve learned there is no perfect product for every client.

Does this sound familiar?
The advisor I spoke to had talked to four different FMOs/companies and each had given him a different
recommendation for their top product.

  • Company ONE told him the best product had a 10 percent bonus.
  • Company TWO told him it had an income rider with an 8 percent income rider roll up, which is “the best one on the market,” according to that organization.
  • Company THREE said that its income account gets a 30 percent bonus upfront, and it’s the best one.
  • Finally, company FOUR reported that its was best because the payout percentage was higher (though it offered a lower income account value).

So the question is, which one is really the best for this advisor’s client? It’s critical that you ignore what I call “phantom benefits”:roll up rate; payout rate; income account bonuses; etc. All are nice benefits, but not as important as the math.

The best solution
It’s important that you research the products to be sure you give each client the best solution. If you are working with an FMO or annuity consultant, are you confident they are giving you the best deal for your client? If there is any doubt, I’d encourage you to get a second opinion and follow these steps for success:

  • Find someone you trust
  • Crunch the numbers
  • Give your clients the outcome they are looking for and the maximum guaranteed income for the rest of their lives.

Shawn Sparks is vice president of marketing at Advisors Excel in Topeka, Kan. For more information, go to


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