As the average life expectancy is continuing to rise you may need to plan for your client’s retirement that could last 30 years or longer. Research from Social Security shows that a healthy 65-year old has a 43% chance of living to age 95.
With this in mind, advisors need to be planning for 30 or more years of income for their retirning clients. As we know defined benefit plans (pension) have largely been replaced by Defined Contribution Plans, such as 401K’s. This has reduced the once sturdy “Three-legged Stool” of retirement income into a two-legged stool supported by Social Security and personal savings. Additionally, the trusted “4% Rule” of distributions should really closer to 3% in the continued low-interest rate environment.
Annuities can be that “third leg” of the stool in retirement income planning, replacing the guaranteed income stream that pensions used to provide. The income that an annuity provides can be guaranteed for life, does not fluctuate market returns, and eliminate the sequence of returns risk inherent in retirement income planning. Give us a call and let us show you how annuities can help your clients plan for their 30-year retirement.