Market volatility and a sustained low interest rate environment have created a host of challenges for financial advisors. One of the most daunting is finding new ways to provide their clients with vehicles to securely accumulate wealth and generate lifetime income as they approach retirement age.
Variable annuities (VAs) with lifetime withdrawal benefits have traditionally been one such option, but with carriers scaling back benefits and increasing income rider costs, their relative attractiveness may have diminished for some. Meanwhile, overall capacity in the variable annuities segment appears to have fallen.
Fortunately, insurance carriers have a number of alternatives to variable annuities that provide security with downside principal protection on the contract value. Many new fixed indexed annuities (FIAs), for example, can fit very well into clients’ retirement plans.