Seems like a lot more than 8 years ago, when income brokers within Fixed Indexed Annuities (FIAs) provided guarantees that were never offered. Historical revenue value growth rates that were as high as 8% are now being surpassed by no-limit strategies. It’s amazing to me how the evolution of income planning has been redefined, especially in less than a decade. Today, more financial professionals are redirecting retirement funds to FIAs that provide growing income streams as well as unlimited, lifetime strategies. Depending on when you plan to retire will determine which income growth strategy may be best equipped to meet your needs. That’s why it’s important to work with a professional who specializes in income planning solutions.

Gone are the days of annual FIA point-to-point strategies that can only provide a 3.0% return, and bon voyage. Through many of today’s specialized index strategies, policyholders within an FIA can now participate in over 90% of the up market (within a default index strategy) with absolutely zero downside. This means that you can never lose your principal or earned interest in the future, regardless of how the market performs. As this latest recession has shown, principle protection in bear markets is key to making your retirement a reality. These recent no-limit strategies are prompting more financial professionals to redirect client funds to missing collateral in a turbulent market. Depending on what your individual circumstances are (retirement timeline) will depend on which strategy best suits your needs.

Revenue payments within the FIAs may be much higher than ever before. Income account securities (non-cash securities) used to determine income payments may participate in up to 250% of the performance of a selected index during the deferral. Additionally, annual income payments can be increased by up to 150% of the same selected rate. For example, a particular AIF that has a 6% annual return (of a selected index) would result in an income payment increase of 9%, which would never decrease! In addition, each year the selected index increases in value, the income will continue to increase by 150% respectively. Within a couple of these strategies, I’ve seen income payments potentially double over a 15-year period, while continuing to increase for life! These are income payments that have never been seen before, designed specifically to protect retirees from absentee pensions and a bankrupt Social Security system.

So how did this evolution happen? Simple. In recent years, analysts have learned to maximize the upside potential within specific indices while protecting the profitability of the issuing company. Due to the extreme market fluctuations we have seen since 2008 (the greatest volatility since the Great Depression), statisticians and actuaries have been able to capitalize on market profit points, passing the profits on to the policyholder.

It remains to be seen where the evolution of revenue planning will end. I can tell you from personal experience that today’s potential income payouts and unlimited strategies were never contemplated 8 years ago. Today’s FIAs are replacing fears of inflation and market crashes with comfort and predictability. Now, finally, retirement can be planned with a better quality of life than ever before!