The New and Ingenious Ways to Generate Lifetime Income for Retirement

SmartAsset: Here's a new way to generate lifetime income for retirement

SmartAsset: Here’s a new way to generate lifetime income for retirement

Many adults nearing retirement age have little or no retirement savings. Actually, on This was reported by the US Government Accountability Office that nearly 50% of households headed by a person 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 understandable that many seniors People worry about paying living expenses after they retire.

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

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

Pension fund innovator announces new lifetime income solution

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 end of retirement date with fixed indexed annuities and a guaranteed lifetime withdrawal advantage, the new product will be Annexus’ second offering to use its patent-pending Lifetime Income Builder.

“Until Lifetime Income Builder, the industry’s attempts to provide built-in lifetime income largely relied on … products that were not optimized to meet the needs of participants,” said Dave Paulsen, Principal Distributor of Annexus Retirement Solutions , in a press release. “This compromised approach created unnecessary complications and forced participants to sacrifice returns and some flexibility and control in order to receive guaranteed income.”

SmartAsset: Here's a new way to generate lifetime income for retirement

SmartAsset: Here’s a new way to generate lifetime income for retirement

Many retirees may be familiar with the popular target date fund, usually through their employer-sponsored retirement plan. Although 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 annuitiesthat offer growth potential and protection from falling markets, to the familiar target date fund, plan participants will be able to benefit from a retirement solution that can accumulate tax-deferred interest and offer a fixed income during retirement.

One continuing concern with this product is portability, or the ability of workers to move from one platform to another. To address this, Annexus provides access to its Annexus Retirement Data Exchange, which enables streamlined communication and administration between registrars.

How saving retirees can benefit

Annexus will provide this new retirement product as part of its defined contribution plan offerings, with State Street Global Advisors providing the underlying asset and index management for the annuity portion. Most target date funds are moved from riskier ones asset allocation mix to fixed income solutions as the participant approaches retirement, in which case the fixed income solution will contain Annexus’ built-in lifetime income building tool.

The company expects to offer its annuity portion through three top-tier insurance providers lifetime income. The multi-carrier model allows insurance providers to bid on pricing on a monthly basis, potentially leading to lower costs and better outcomes. The fund will pay 6% income on the high value of the balance on the target date and if a participant’s account balance is exhausted before the end of his life, the product includes a guaranteed income payment of 4.5% for the rest of the participant’s life.

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SmartAsset: Here's a new way to generate lifetime income for retirement

SmartAsset: Here’s a new way to generate lifetime income for retirement

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

Retirement Planning Tips

  • Not sure what investments or strategies will set you up for a smooth retirement? For a solid, long-term financial plan, consider speaking with a qualified financial advisor. SmartAsset’s free tool connects you with up to three financial advisors who serve your area, and you can interview your advisor matches for free to decide who is the best fit for you. If you’re ready to find an advisor who can help you achieve your financial goals, start now.

  • Use SmartAsset for free retirement calculator to get a good first grade on how much money you will need to retire.

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

The message Here’s a new way to generate lifetime income for retirement first appeared on SmartAsset Blog.

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