Laddering Annuities Could Resolve Retiree Income Issues

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The Zone System for Choosing Retirement Income Products, Part 1

How do you decide which product to use when your client needs lifelong income—especially if his retirement savings aren't what they should be? One advisor classifies his clients into zones to decide whether to go with an investment portfolio or buy a life or variable annuity. Here is his system for making these crucial product decisions. Part 1 of 2.

Longevity Annuities: The Perfect Solution to the Retirement Income Dilemma?

Delayed-payout annuities give clients control over their portfolio—particularly in the early years of their retirement—and they hedge against the possibility that clients will outlive their savings. The key decision is how much to allocate to these longevity annuities and when.

Understanding Annuity Taxation

Annuity withdrawals are taxed as ordinary income, which should prompt a discussion with clients: Is it better to pay capital gains taxes now or defer taxes until retirement? The answer depends on your client's retirement tax bracket, insurance, other income streams, and his estate plan.

How Much Alpha Do Clients Need in Retirement?

One way to determine a client's withdrawal rate is to calculate his minimum required alpha given his time horizon, assets, and income needs. Then you can decide which products to invest in and whether to apply an active or passive portfolio approach.