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April 14, 2015 at 10:06 AM
Let’s say tomorrow is payday. Your boss hands you your paycheck and tells you that paycheck amount will stay the same throughout the duration of your career.
“You probably wouldn’t say OK to that,” said Michael Kazanjian during a recent phone interview with ThinkAdvisor. “If you wouldn’t accept that during your career, why would you accept that during your retirement?”
Kazanjian, head of product marketing for Lincoln Financial’s annuities business, believes there’s an opportunity to maximize a client’s retirement income.
After all, it’s no secret that the top fear among retirees and soon-to-be retirees is outliving their income.
“Guaranteed lifetime income is important,” Kazanjian said, adding, “Guaranteed income is a good thing but we really think your income should have potential to rise.”
He offered up one solution: Lincoln Financial’s patented income distribution method i4LIFE Advantage Guaranteed Income Benefit.
A Lincoln variable annuity with i4LIFE Advantage, an optional annuity rider feature available for an additional cost, provides lifetime income and the potential for increasing payments during retirement, Kazanjian says.
The rider combines traditional guaranteed minimum withdrawal benefits with the tax-efficient income provided through annuitization into one income distribution strategy.
The guaranteed income benefit portion of the i4LIFE strategy guarantees the client a minimum payment, and future i4LIFE Advantage payments will never be less than the first protected payment — as long as the client does not take additional withdrawals.
The potential for increasing income payments is based on the performance of the underlying investment accounts. Each i4LIFE payment returns a portion of the client’s original investment together with a portion of its gains. For example, a client’s i4LIFE Advantage payments will increase if the return exceeds 4% net of the annuity fees and expenses, the “assumed investment return.”
