Increase Client Income 20-40% Without Riders

Income Under Management™ is a brand new solution that works better than conventional income planning methods.  It is can help you get clients to take action in a matter of minutes rather than days or weeks.
Click to watch a video that reveals the power of IUM and how it can easily help you…
– Boost your closing ratio by up to 300%
– Double or even triple your credibility in the first 10 minutes of meeting a prospect
– Out-perform “traditional” income planning advisors and as a result, gain more clients
– Make more money for both you and your clients
Plus, you’ll see exactly how IUM outperforms the: 4 percent rule, 2.6 percent rule, and expensive, account-draining income riders based on real retirement income amounts.
Regardless of if you sell annuities, do AUM or any combination, the game is about to change in a big way. The days of selling products or investments without detailed disclosure of fees and compensation is quickly coming to a close. This Wednesday we are going to spend 35 minutes showing how you can turn the forthcoming regulatory changes into a true actuarial edge for both you and your clients.
Using AnnuityCheck™ combined with your favorite carriers such as:
Athene, Allianz, AIG, American Equity or any hypothetical asset, we are going to give you the ability to precisely calculate income strategies that will put you in an entirely new class in your local market.
AnnuityCheck™ has developed the most powerful income illustration system in the world and we are doing a full test drive this Wednesday at 9:00 am PST to let you see why top producers are using our technology to take their production to new levels without using costly income riders and providing 20-40% payout increases to clients and prospects.
We will be sharing these “Must Have” illustration capabilities:
1: Growth Only (No Withdrawals)
2: Specified Withdrawal Amount
3: Maximum Income
4: Maximum Income w/ SPIA
5: Maximum Income w/ JT SPIA
6: Minimum Deposit Annuity (solve for needed income)
You can quickly switch carriers, products, strategies and Illustration types. On top of generating substantial payout increases, you will save  you and your staff 5-10 hours weekly in preparing and designing cases.
Do the New DOL Regulations and Future Commission Disclosures Have You Gasping for Breath?
If YOU still require products with income riders and 8% upfront compensation just to make 6-figures, you might be in BIG, BIG Trouble.
But that’s good news…
It’s good news, if you’re willing to reach out for the lifeline we’re about to toss you.
1: Use DOL Guidance to Double Your Annuity Production In 2016
2: Create Level Commission Illustrations Based on Product and Withdrawals
3: How to Calculate Exactly Which Products Will Make You the Most (The answers may surprise you)
4: How to Use the Gold Standard of Finance (Internal Rate of Return) to Prove Your Strategies to Clients
Whenever the industry shakes things up, it’s a chance for shrewd, savvy advisors to swoop in and make a killing, while the Chicken Littles run around shouting, “The sky is falling the sky is falling!”
But you must pay very close attention.
You can give you and your clients a six-figure raise and create an unbeatable advantage in the annuity income market. You are going to gain a new momentum. Nothing beats momentum. You go from victory to victory while your competition struggles with out-dated income riders.
The rules have changed. It’s time to master the new ones. Our software company has grown 847% since January 1st. Find out what your competition is up to, before your clients do.
Your new actuarial advantage and training begins this Wednesday at 9:00 AM PST.

SPIA Payouts Surge While Variable Annuity Income Riders Slide

As I have discussed over last two years, Income riders charges are up, payout factors down and most products produce less than a 1% IRR at average life expectancy.  
 
Income riders are falling even harder than I expected.  
 
According to LIMRA:
“One of the factors driving VA sales declines has been a drop in sales of products with guaranteed living benefit riders,” noted Giesing in a statement. “LIMRA Secure Retirement Institute is expecting sales of variable annuities with a GLB rider to be around $50 billion in 2016. This is a decrease of nearly $20 billion from last year and a drop of over 50 percent from just 5 years ago.”
 
It’s only a matter of time before the reality of income rider payouts hits the FIA world and the public stops buying secondary account features at a high cost to their heirs and a 50% chance of earning less than 1% over the life of their annuity due to high fees and charges. 
 
What can you do now? Gain insight, so you can make an informed decision. 
 
Income Under Management™ which uses a mathematically sound process to calculate systematic withdrawals and provide a SPIA estimate at a later age in the event a client wishes to purchase a guaranteed income stream at that point. The net effect results in an average increase of $100,000 in saved fees for not choosing an income rider and focusing on a low or no-fee accumulation product with a strong participation rate.
 
After AnnuityCheck™ updated SPIA rates for the month, a 65-year-old male would need $3,218 less to generate a $20,000 guaranteed income at age 83. $151,103 vs. $154,321 before the 1/4 % rate hike.  
 
Are all income riders evil? Absolutely not, but without knowing the numbers and the odds, you are in the dark. 

The Downside of Decumulation

The question isn’t at what age I want to retire, it’s at what income.
– GEORGE FOREMAN

In this article, we will share an approach that will expose the weakest links to the most common choices when purchasing an annuity and provide you with the knowledge to increase your client income by as much as 20-40% using a new decumulation strategy. This approach will preserve and protect accumulated value and provide significant flexibility. Determining the best withdrawal rate for retirement can be a daunting process, especially when faced with uncertainties, such as:

  • Unknowable Future Returns
  • Unknowable Life Expectancy
  • Unknowable Future Expenses

A good question to ask yourself when planning is:
What assumptions must prove to be true, in order for my plan to work?

Over the last twenty years, the traditional options to increase or even maintain a nice retirement income has narrowed substantially.

 

Decumulation Risks

It is a well-known fact that the descent is the most dangerous part of mountain climbing. The same is true with retirement income. There are two phases to your investment life, accumulation, and decumulation. The accumulation phase is more forgiving because the longer time frame helps to absorb the market volatility and downturns and is the period where you are working and saving for the future. During the decumulation phase there is much impacting your account and several years of vicious volatility or low returns can negatively impact your lifestyle if you don’t have the right approach. This second phase receives little attention from the financial industry because most firms are focused on keeping you fully invested and increasing their Assets Under Management.

In an effort to keep you fully invested in the market, the most publicized strategies for decumulation have revolved around managing the risk of a volatile market by reducing the withdrawal amount.

Popular Income Options

In this section, we are going to help you better understand the mathematical principles of the various options. We are not covering the interest only option, such as bank CD’s, because, in today’s low-interest-rate environment, it’s not viable for most retirees.

1: Withdrawals While Remaining Fully Invested in the Market

1994: The 4% Rule
William Bengen Co-Authored A Study With Morningstar, Inc. and Recommended A Withdrawal Rate of four Percent.

2013: The 2.8% Rule
Morningstar Revised the 4 Percent Rule Due To:

  • Volatile Markets
  • Low-Interest Rate Environment
  • A More Conservative Investment Mix

Remaining fully invested in the market, subjects’ retirement accounts to market swings creating a sequence of returns risk. If you withdraw income from a depleting account, you could magnify the losses and significantly reduce the income potential of the account.

2: Fixed Index Annuity with Guaranteed Income Rider

2005: The FIA Annuity
Prior to 2005, there were three types of annuities; Fixed or Variable for Growth, and Immediate Annuities for lifetime income. In 2005, the Fixed Index Annuity (FIA) made its way into the marketplace with multiple features such as returns linked to an index, and optional guaranteed income strategies. The primary benefits of the FIA are impressive:

  • Protect the Downside in Volatile Markets
  • Participate in Upside Market Growth
  • Provide an Optional Rider for *Guaranteed Lifetime Income

Protection from downside risk while still participating in the upside is the strongest reason for using an FIA. Unfortunately, many of the carriers have designed products with cap rates which limit the total upside potential of the contract to a percentage that they can move up or down. So, if your selected index earned six percent, but your cap rate was three percent, you would only earn the three percent for that period. We will come back and discuss the solution using our Income Under Management approach.

On the surface, the guaranteed income appears to be the perfect answer when combined with the growth and protection provided by the FIA contract, but as we will discuss in a future post, the real rate of return for Lifetime Guaranteed Income Riders are far less than the promotional material indicates.

Relevance of the Big Picture

One of my favorite ways to relax and reflect is by laying across our 16 ft trampoline with my kids and looking up at the night sky discussing the enormity of the universe. During these times, I can’t help but reflect on what we must look like from out there? One of my favorite authors is the late Carl Sagan.

Image

Taken in 1990 by NASA’s Voyager 1 spacecraft, the “pale blue dot” photo shows what our planet looks like from 4 billion miles away. Earth is the tiny speck of light indicated by the arrow and enlarged in the upper left-hand corner. The pale streak over Earth is an artifact of sunlight scattering in the camera’s optics

In his book Pale Blue Dot, astronomer Carl Sagan eloquently tried to express how he felt about this photo taken by The Voyager spacecraft 21 years ago as it left our galaxy:

Look again at that dot. That’s here. That’s home. That’s us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives. The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every ‘superstar,’ every ‘supreme leader,’ every saint and sinner in the history of our species lived there — on a mote of dust suspended in a sunbeam.