It seems like a lot longer than 8 years ago when income jockeys within Fixed Indexed Annuities (FIAs) provided collateral that was never offered. Historical earning value accrual rates that reached 8% are now being outpaced by no-cap strategies. It’s amazing to me to see how the evolution of revenue planning has been redefined, especially in less than a decade. Today, more financial professionals are redirecting retirement funds to FIAs that provide ever-increasing streams of income, as well as unlimited strategies, for life. Depending on when you plan to retire, it will be determined which income-building strategy may be best equipped to meet your needs. That’s why it’s important to work with a professional whose expertise falls within revenue planning solutions.

The days of the FIA’s annual point-to-point strategies that can only deliver a 3.0% return are long gone, and congratulations. Through many of today’s specialized index strategies, policy owners within an FIA can now participate in 90% or more of the bull market (within a predetermined index strategy) with absolutely zero hassle. This means that you can never lose your principle, regardless of the interest earned in the future, on how the market performs. As this past recession has shown, primary hedge in bear markets is key to making your retirement a reality. These recent limitless strategies are causing more financial professionals to redirect client funds to missing collateral in a turbulent market. Depending on your individual circumstances (retirement term), it will depend on which strategy best suits your needs.

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

So how did this evolution happen? Easy. Over the past few years, analysts have learned to maximize 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 highest volatility since the Great Depression), statisticians and actuaries have been able to capitalize on the profit points of the market, passing the profits on to the policyholder.

It remains to be seen where the revenue planning evolution ends. I can tell you from personal experience that today’s potential income payments and limitless strategies were never contemplated 8 years ago. Today, AIFs are replacing fears of inflation and market recessions with comfort and predictability. Now, finally, retirement can be planned with a higher quality of life than ever!

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