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Generation Income : How One Variable Annuity is Addressing Today ’ s Realities
Today , retirement can feel more uncertain than ever . Only 21 % of people have pension plans 1 , longevity risks are mounting , and Social Security ’ s replacement rate fell as the program ’ s full retirement age rose to 67 . 2 Dwindling pension plans , rising healthcare costs and the presence of market volatility mean preretirees need a more adaptable approach to growing and protecting their retirement income .
Many are focused on saving to support their lifestyle in retirement , but a crucial part of retirement strategy is securing flexible , guaranteed income they can ’ t outlive — and ensuring that income is protected , even if they retire in a down market . That ’ s where Protective ® Aspirations variable annuity can help complement client portfolios with strong guaranteed income that seamlessly adapts to the ups and downs of retirement .
In addition to guaranteed income , clients need solutions that can pivot if plans change . A lot can happen over the course of saving for retirement — health and marital status can change , income can be impacted by career changes and estate planning can be cumbersome . Unlike variable annuities with less optionality , Protective Aspirations variable annuity is built to deliver strong income , more customization options , and the flexibility to adapt to life ’ s twists and turns . In this article , we ’ ll break down some of its key product advancements .
Strong Income & Flexible Benefit Options
Clients should be confident their retirement goals are protected , no matter what life has in store . That ’ s why Protective ® Aspirations variable annuity with the SecurePay Protector income benefit 3 is designed to deliver strong guaranteed income — powered by a 7 % compounding roll-up rate for benefit base growth — with the range of unique features that allow you to tailor plans to help meet your clients ’ changing needs over time . While other variable annuities use a banded approach that plateaus for a number of years , Protective Aspirations with the SecurePay Protector℠ income benefit offers more confidence with a powerful combination of a compounding benefit base roll-up and competitive age-based withdrawal rates that increase each year of deferral .
A powerful income deferral feature — SecurePay Reserve offered by Protective ® Aspirations variable annuity — allows clients to take less than the annual withdrawal amount if needs change , and access those delayed funds for unexpected expenses that may arise down the road . The ability to defer up to 3x the annual withdrawal amount lets clients use those funds when and how they see fit . 4
Living longer and the costs associated with aging can also have a significant impact on clients ’ retirement savings . In fact , over 50 % of pre-retirees today fear outliving their savings . 5 That ’ s why Protective ® Aspirations variable annuity offers an increased income benefit to help pay for nursing home care . SecurePay NH feature allows clients to double their annual withdrawal percentage to a maximum of 10 % for up to five years if they ’ re confined to a nursing home and meet certain eligibility requirements . 6 This differentiated benefit can provide another layer of protection if needs change down the road .
Tailored Approach to Investment Strategy
Protective ® Aspirations variable annuity offers a broad range of investment options and control over investment strategy with quality investment options from over 100 leading fund managers , allowing you to build custom or turnkey diversified portfolios that align with your clients ’ individual risk tolerance , goals and time horizon to maximize income . Having control over investment strategy
28 | FINANCIAL ADVISOR MAGAZINE | JULY / AUGUST 2024 WWW . FA-MAG . COM