Creating a Lifestyle Annuity

This article first appeared in Rethinking65 as "Help Clients Identify Their ‘Lifestyle Annuity’ First."

Note: an audio version of this article is available on my website, see below for the link.

Clients and prospects can get apprehensive when the phrases “financial strategy” and “creativity” are used in the same sentence. But ?I ?have learned in working with financial advisors that a lot of ingenuity goes into crafting the right monetary approach. That creativity is necessary when most people in their 50s have?under $60,000 saved for retirement.

A topic that financial professionals tell me is discussed with great frequency is annuities. They offer guaranteed income streams and can be a key element of a secure future for those seeking greater financial consistency. As you work with clients to understand their risk tolerances and income needs, keep in mind that traditional annuities come in three main varieties.

• Fixed arrangements, which offer a guaranteed, albeit lower, payout rate with minimal risk.
• Variable plans, which invest in the market and can give higher returns but also carry greater market risk.
• Indexed designs, which track a market index, offering growth potential with some downside protection.

If you are already using or thinking about annuities as a part of your offering, consider how they aligns with the lifestyle your clients plan to lead. Nearly 36% of those in their 50s who have taken my Retirement Time Analysis (RTA) self-assess they lack a desired structure in their life. That number improves only a little to 31% for those 60 and older. So, about one-third of your retirement-age clients are probably grappling with understanding the basic expectations of retirement living, not to mention the emotional challenges awaiting them.

Before you dive into annuities, determine whether your clients and prospects have a fixed, variable or indexed post-career lifestyle mindset. The more you understand their personal motivations, the better you can counsel them on the financial strategy.

Want to see the rest of the article or listen to an audio version? You’ll read:

• Fixed Lifestyle Annuity
• Variable Lifestyle Annuity
• Indexed Lifestyle Annuity
• Aligning the Lifestyle to the Financial Annuity

You can do that right here -------->? I want to read or listen to the rest of the newsletter.

David Buck is the author of the book The Time-Optimized Life, owner of Kairos Management Solutions, LLC, and founder of the Infinity Lifestyle Design program. As a Certified Professional Retirement Coach (CPRC), David works with financial services providers helping their clients create a post-career lifestyle strategy. To learn more, contact him at [email protected] or visit Infinity Lifestyle Design.