Annuity Income Riders: Understanding the Value of Living Benefits (REPLAY)

Guest Speaker: Michael Finke, PhD, CFP - The American College A living benefit rider on an annuity provides a unique lifetime income guarantee that helps a retiree meet a fixed expense goal at a lower cost than traditional bond investments. Michael Finke will compare the cost of creating a base of income to fund fixed retirement expenses using a bond fund, bond ladders, and a living benefit on a fixed or variable annuity. Michael will show how indexing strategies modestly impact the likelihood of future income growth, explain how the annuity should be incorporated into a traditional asset allocation, explain the wealth tradeoffs of a living benefit, and explain how to evaluate an existing annuity that includes a living benefit as a fiduciary. Advisors will learn how income riders are priced and what they actually cost the client, as well as how mortality credits work and why they allow an annuity to reduce the bond assets needed to fund a given income goal. The session will also demonstrate how to evaluate a client's existing annuity against the alternative of building income from a bond portfolio. Through real-world case studies, attendees will see how, when, and where a lifetime income guarantee can strengthen a retirement plan.