In a recent article on LifeHealth, RetireOne Chief Distribution Officer Jeff Cusack discussed the potential risks that retirees face in during the fragile decade due to increasing market volatility. In the current economic environment of pandemic recovery, ongoing political uncertainty, and demographic shifts, market volatility is ongoing.
This is of particular concern to those entering the fragile decade. Cusack highlights the importance of having a diversified retirement portfolio, with a mix of both fixed-income and equity investments, but notes that retirees should prioritize preserving their wealth, rather than trying to maximize their returns.
That’s where annuities come in, contingent deferred annuities in particular. Here’s a quote:
CDAs provide lifetime income protection so that clients don’t have to be concerned with market risk, sequence-of-returns-risk or longevity risk. CDAs can wrap client brokerage accounts, Individual Retirement Accounts (IRA), or Roth IRAs, and provide a floor of income that is guaranteed by an insurance company to be based on the initial investment, even if markets fall. However, if the market is performing well, income payouts are based on a portfolio high-water mark each year. If we experience another lengthy bull market and longevity risk is no longer in play for your client’s retirement assets, they may simply cancel the insurance with no penalties.
Want to learn more? Head over to LifeHealth and read the article.