The New and Genius Ways to Generate Lifetime Income Before Retirement

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SmartAsset: Here’s a New Way to Generate Lifetime Income Before Retirement

Many adults approaching retirement age have little to no retirement savings. In fact, the U.S. Government Accountability Office said nearly 50% of households headed by someone age 55 and older had no retirement savings in 2016. And as the Social Security retirement age rises and inflation hits wallets across the country, it’s Understandably, many older adults worry about paying their living when they retire.

To help solve this problem, a fund innovator teamed up with the world’s fourth largest asset manager to deliver a lifetime income generator for retirement. Annexus Retirement Solutions has created a state-of-the-art retirement product that aims to provide plan participants with a whopping 6% income for life. Here’s what you need to know.

A financial advisor can help you plan for retirement and help you select investments that align with your financial goals. Talk to a qualified advisor today.

Pension fund innovator announces new solution for lifetime income

In late March 2022, Annexus Retirement Solutions announced a new strategic partnership with the world’s fourth largest asset manager, State Street Global Advisors, to develop a lifetime retirement income solution for defined contribution plan participants. Combining a target-date retirement fund with fixed indexed annuities and a guaranteed lifetime withdrawal benefit, the new product becomes Annexus’ second product offering to leverage its patent-pending Lifetime Income Builder.

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“Up until Lifetime Income Builder, the industry’s efforts to deliver in-plan lifetime income depended largely on … products that were not optimized to meet the needs of participants,” said Dave Paulsen, Chief Distribution Officer for Annexus Retirement Solutions, in a press release. “That compromised approach created unnecessary complexity and required participants to sacrifice returns and a degree of flexibility and control to receive guaranteed income.”

SmartAsset: Here's a New Way to Generate Lifetime Income Before Retirement

SmartAsset: Here’s a New Way to Generate Lifetime Income Before Retirement

Many retirement savers may be familiar with the popular target date fund, usually through their employer-sponsored retirement plan. While they offer a simplified, tax-advantaged retirement solution, target-date funds are still subject to the ups and downs of the markets. However, by adding fixed indexed annuities, which offer growth potential and protection against bear markets, to the well-known target-date fund, plan participants can benefit from a retirement solution that can accrue tax-deferred interest and provide a steady income during retirement.

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One lingering concern about this product is portability, or the ability for employees to move from one platform to another. To address this, Annexus provides access to its Annexus Pension Data Exchange, which enables streamlined communication and administration between record holders.

How Retirement Savers Can Benefit

Annexus will offer this new retirement product as part of its defined contribution plan offering, with State Street Global Advisors providing the underlying asset management and index for the annuity portion. Most target-date funds move from a riskier mix of asset allocation to fixed-income solutions as the participant approaches retirement, and in this case the fixed-income solution would include the Lifetime Income Builder embedded in Annexus.

The company expects to offer its annuity portion through three leading insurance providers to generate lifelong income. The multi-carrier model allows insurers to bid on a monthly basis, potentially leading to lower costs and better results. The fund will pay out 6% income from the high balance target date, and if a participant’s account balance runs out before the end of life, the product includes a guaranteed income distribution of 4.5% for the rest of the participant’s life. the participant.

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Bottom Line

SmartAsset: Here's a New Way to Generate Lifetime Income Before Retirement

SmartAsset: Here’s a New Way to Generate Lifetime Income Before Retirement

Annexus Retirement Solutions has announced a new product offering in partnership with the world’s fourth largest asset manager, State Street Global Advisors. The product, a combination of a target-date retirement fund and a fixed-indexed annuity, aims to solve the US retirement crisis by providing a lifetime fixed-income solution. Payments can be as high as 6% of the fund’s highest figure, with a guarantee of 4.5% income, even if the account balance reaches zero before a participant dies. Retirement savers can rest assured that their savings will last no matter what.

Retirement Planning Tips

  • Not sure which investments or strategies will help you retire smoothly? For a solid, long-term financial plan, consider talking to a qualified financial advisor. SmartAsset’s free tool matches you with up to three financial advisors serving your area, and you can interview your advisors at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

  • Use SmartAsset’s free retirement calculator to get a good first estimate of how much money you’ll need to retire.

Photo credit: ©iStock.com/monkeybusinessimages, ©iStock.com/Igor Kutyaev, ©iStock.com/pixelfit

The post Here’s a New Way to Generate Lifetime Income for Retirement appeared first on SmartAsset Blog.

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