FIAs for Retirement Income (Why Not?)
July 9, 2019 by Kerry Pechter
To equip a 55-year-old with a fixed index annuity (FIA) so he can flip on an income stream in 10 years isn’t so different from advising him to buy 10-year bonds today and swap them for a life annuity in 10 years.
Click HERE to read the full story via Retirement Income Journal.
——————————————————————————————————————————————————-
But, while overall sales of FIAs are up, fewer Americans every year intend to use them for retirement income and many of those who employ them for income use them inefficiently, according to data that Wink, Inc. shared with RIJ for this report.
——————————————————————————————————————————————————-
The accumulation focus is tied to the increased use of volatility-controlled “hybrid” indices. Many FIA issuers now offer crediting methods linked to these indices “because they can promote higher participation rates and lower spread rates on them than on crediting methods linked to the S&P500 Index,” said Sheryl Moore, president and CEO at Wink, Inc. “The focus on hybrid indices, and the ‘accumulation sale,’ has reduced GLWB election rates.”
