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Annuities

Annuities

Annuities are perhaps the only way to mitigate longevity risk, but they also are a more efficient means of generating retirement income. Annuities can quickly outperform fixed income in generating retirement income, and provide payouts long after fixed income portfolios would be depleted. To see how a no-load annuity can solve for income needs of your clients in retirement, visit our Guaranteed Income calculator.

Get the facts

Leading academics provide insight into how annuities can generate income more efficiently than traditional fixed income portfolios. This efficient income generation, along with the guaranteed income stream, can have a meaningful impact on financial outcomes for clients in retirement. 

Advisor Reaction: "I can't unsee this."

Many advisors are surprised when they realize how an annuity can outperform their fixed income strategy to deliver secure retirement income for their clients. David Lau describes an advisor's reaction after taking a closer look at the impact of a Commission-Free annuity on a client's financial plan.

Advisor Reaction: “I can’t unsee this.”

David Lau describes an advisor's reaction after taking a closer look at how annuities can benefit their clients.

Annuities

Annuities are perhaps the only way to mitigate longevity risk, but they also are a more efficient means of generating retirement income. Annuities can quickly outperform fixed income in generating retirement income, and provide payouts long after fixed income portfolios would be depleted.

Type Summary
Buffer Annuity

Buffer annuities are tax-deferred insurance vehicles that provide a defined degree of upside potential with a defined degree of downside protection from potential downturns in the market. Assets are primarily invested in fixed income with an allocation to derivatives, such as options contracts, futures, and swaps, to provide the potential for...

Solves for Principal Protection, Retirement Income
Deferred Income Annuity

A deferred income annuity is a contract funded with a lump-sum payment (premium) in exchange for guaranteed income payments at a future date. Also known as a longevity annuity because of QLAC-eligibility, a DIA can serve as a pension-like income stream for investors without a defined benefit plan through their employer. A DIA helps bridge an income gap and maintains an...

Solves for Retirement Income, Tax Deferral
Fixed Indexed Annuity

Fixed indexed annuities are tax-deferred insurance products that provide market upside, while protecting principal from market losses. Assets are allocated into indices that are designed to replicate market performance. These indices are typically accompanied with cap rates, spreads, or participation rates.

Solves for Retirement Income, Principal Protection, Annuity Rescue+
Fixed Annuity

Fixed annuities are tax-deferred insurance vehicles that provide a guaranteed minimum fixed rate of return that is typically reset on an annual basis. Some types of fixed annuities, known as multi-year guaranteed annuities (MYGAs), can offer a fixed rate of return for the duration of the product. Fixed annuities provide tax...

Solves for Retirement Income, Principal Protection, Tax Deferral
Single Premium Immediate Annuity

A single premium immediate annuity is a contract funded with a single lump-sum payment (premium) in exchange for guaranteed income payments. Designed to supplement retirement income, a SPIA insures the purchaser against outliving their money or exhausting it within a certain timeframe. A SPIA can begin paying income immediately, bypassing...

Solves for Retirement Income, Principal Protection
Variable Annuity

Variable annuities are tax-deferred insurance contracts that provide investment options in the form of funds called variable insurance trusts (VITs). These products often offer insurance benefits such as guaranteed income or a death benefit. The ability to annuitize assets into a guaranteed lifetime income stream is the fundamental feature that qualifies...

Solves for Tax Deferral, Annuity Rescue+, Legacy Planning

Insights and Resources

White Paper

Oct 28, 2016

The retirement income showdown regards finding the most efficient approach for meeting retirement spending goals...

David Lau

Video

Feb 07, 2019

DPL Financial Partners Founder and CEO, David Lau, addresses why fiduciaries need to be involved...

Case Study

Many breakaway advisors have experience with insurance. But when starting a new RIA practice, advisors...

David Lau

Video

Mar 27, 2020

Founder and CEO of DPL Financial Partners, David Lau, explains why advisors should compete in...

Video

Feb 07, 2019

DPL’s David Lau talks about the reasons why DPL believes that annuities are an important...

Webinar

Oct 11, 2018
DPL Founder and CEO, David Lau, and TIAA’s Dennis Rupp, Director of Insurance Distribution for...

Article

Jul 04, 2015

Income annuities provide payments precisely matched to a client’s longevity while stocks provide opportunities for...

David Lau

Video

Feb 07, 2019

DPL’s David Lau talks about considerations carriers need to consider when developing a distribution strategy...

Article

Oct 01, 2016

The Journal recently talked with Finke to learn about his current research projects, his views...

Common Questions

How do income annuities affect wealth accumulation?

By more efficiently funding income (requiring fewer assets) than traditional fixed income portfolios, income annuities leave more client assets that can be invested in equity portfolios.

How can annuities help with wealth accumulation?

Annuities can help clients accumulate wealth in two different ways: 1) through tax deferred accumulation, and 2) through the efficient funding of retirement income. The additional tax deferral that can be accessed through low-cost variable annuities can be beneficial to high income earners who quickly max out their 401(k)s and IRAs. Academic research shows that annuities can fund retirement income more efficiently than traditional fixed income portfolios. By requiring fewer assets to fund income needs, it leaves a greater share of a client’s portfolio to be invested in long term equity strategies to improve accumulation potential.

How can annuities improve legacies?

The basic premise is that by using an annuity to efficiently fund retirement income, more assets are available to be invested in equities to grow legacy assets. Clients with longer life expectancies will benefit most as they generate income from their annuities even after their cash balances have been exhausted.

My firm doesn’t address annuities clients already own, why should we?

Clients can often save thousands of dollars in product fees when it makes sense to move from a commissioned insurance product to a low-cost commission-free product. In addition to providing benefits for your client, being able to provide insurance solutions expands your firms offerings and creates potential for increased AUM.

Does DPL perform analysis of annuities my clients already own?

Yes. One of the key services we provide to our members is analyzing existing client policies. From our analysis we will recommend how to use the annuity within a client’s financial plan whether that is leveraging features of the existing policy or using the policy to fund another policy that may be able to achieve their goals more efficiently.

Get Started

To learn more about low-cost, Commission-Free solutions call us at 888.327.0049 and speak to a DPL consultant.

DPL


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