Scenario One
A client asked us if there was a way to minimize stock market risk to his $1M IRA account and to make sure his retirement income will never decrease, regardless of stock market fluctuations.
Our answer to the client’s question is, yes. We facilitated a tax-free exchange of the client’s current stock market exposed IRA account investments, for an IRA investment into an annuity contract that is guaranteed never to suffer losses, regardless of market conditions. Our contractually guaranteed recommendation includes planning flexibility to defer choosing when to start receiving annuity income until the client is ready to make that decision, and the annuity income is payable until the later death of both spouses.
Most annuities contractually guarantee a level annual fixed income. The annuity we recommended guarantees an annual income amount that may increase and is guaranteed to never go down. Tied to an outside index like the S&P 500, when the outside index performance is positive, future yearly income increases and is guaranteed to never be less than the previous year’s income. If the index performance is negative, there is a floor of 0% that contractually guarantees the client will never participate in market losses.