Real World Case Study: Solving for Guaranteed Income with a 1035 Exchange

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Commission-Free Annuities are a Great Way to Deliver Packaged Income

DPL members are turning to fixed indexed annuities to generate guaranteed income for their clients in retirement. Commission-Free annuities are an efficient way to deliver a retirement paycheck month after month, and provide clients with the peace of mind that they won't outlive their money.

Insights and Resources

Common Questions

Are all SPIAs illiquid?

Yes, once assets are invested into a single premium immediate annuity, they have been annuitized with the insurance carrier and turned into an income stream. For clients who fear “losing” to the insurance carrier, utilizing a "period certain" feature can ensure heirs receive assets should the client pass away earlier than expected.

What product types can provide guaranteed lifetime income?

Most advisors think of single premium immediate annuities (SPIAs) when they think about lifetime income, but other types of annuities also can be used. Fixed Index, Variable and Deferred Income annuities can all provide guaranteed lifetime income. Based on client objectives, your DPL Consultant can help you find the right product type to meet their needs.

Why is guaranteed lifetime income important?

Lifetime income is important to clients for many reasons, both financial and psychological. Lifetime income guarantees through annuities can more efficiently fund retirement income needs while helping mitigate sequence of return risk and longevity risk. It also provides psychological benefits to clients knowing their income is secure even when markets may not be.

Why would you use a fixed index annuity (FIA) for retirement income?

The principal protection aspect of FIAs make FIAs a strong choice for clients nearing or in retirement to help mitigate sequence of returns risk. FIAs also can have strong payout options that often increase when clients delay taking income payouts. DPL advocates considering an allocation to FIAs as part of a client’s fixed income portfolio as they near retirement.

Why would you use a variable annuity (VA) for retirement income?

While income payout rates are typically lower in VAs than other products, variable annuities provide the most potential upside. For clients with longer investment horizons, the value of tax deferral can help accumulation, potentially providing a larger balance to drive the income payments when income features are elected.

Have more questions about guaranteed income products?

Browse webinars, whitepapers and videos to learn more about retirement income or call to speak to a DPL consultant.