The Security Benefit SIA annuity is one the highest income paying indexed annuities available. This product should be one of the first choices for clients that need guaranteed future income from an indexed annuity. The account crediting methods on this product are nothing out of the ordinary but the amount of income it can produce puts it in a unique class.
With the decline of private pension plans and worries about the future of social security, retirement planning is more important than ever. Many people make a commitment to save money in order to supplement Social Security and maintain our lifestyle when the time comes to retire. We also spend a great deal of time trying to figure out the best investment approach available.
Unfortunately, most people have no idea how much they actually need to save. A recent study in CNN Money showed that, of those saving for retirement, only 10% had assessed the amount they need to save. The general concensus is to put away 6% to 8% percent of earnings every year but this really does nothing to address each persons unique situation. We also tend to ignore the substantial effects inflation will have on future income.
We utilizes a software program called IMAX that provides clients with a picture of how much they need to save for a comfortable retirement. The program takes all current variable into consideration such as inflation rate, future social security payments and COLA increases, investment return, taxes, future living expenses, ect. in order to paint a picture of your savings needs. IMAX will provides a detailed report on your current situation and will show if adjustments are needed going forward. Using the program you can also see the effect that changes to current strategies will have on future results.
Please contact us if you would like to have a personal profile completed. There is no cost for this service and it will provide real, tangible information that can be used for current and future retirement planning.
A sample profile is attached here for review
When it comes to generating guaranteed income, Security Benefit has had the highest paying deferred income product on the market for two years with the Secure Income Annuity. The Secure Income annuity has simply provided the highest payout to clients looking for future income.
With the release of their new product called the “Total Value Annuity” they are taking a different approach. While the Secure income annuity provided the highest income payout, it did not offer any additional features that someone may be looking for. So how does the new “Total Value Annuity” stack up with the “Secure Income Annuity”? Here is a review
Income- The Total Value annuity provides a 10% bonus on premium and then will roll up income payments at a guaraneed minimum of 4% compound per year. The payouts in year 1 are comparable to those provided by the Secure Income annuity in the fist year. (The older Secure Income Annuity starts to payout substantially more as you defer income for multiple years however) It also provides the potential for higher payouts by using a stacking feature. This feature allows any market based gains to be added on top of the 4% minimum in any given year.
Which is better?- The older “Secure Income Annuity” simply offers guarantees that the new product can not match. While the new version gives potential for greater income gains, it can not guarantee them for income planning purposes. The “Secure Income Annuity” clearly wins when it comes to income.
Death Benefit– The old Secure Income product only guaranteed the account value as a DB. The new product provides a 10% bonus and a guaranteed DB roll up of 4% compound to the payout per year. It also allows for any gains to be stacked on top of the 4% minimum. This option will be very appealing to those who want to leave as much qualified money as possible to heirs without the Required Minimum Distributions eating away at the account balance. This provides a substantial guaranteed Death Benefit and is a huge advantage over the old product.
Which is better?- New product is a huge improvement over the old product and offers one of the best Death Benefit options available
Potential for Account Value Gain- The Total Value Annuity offers the same accumulation accounts as the old product with an annual point to point account capped at 3% per year and a fixed account at 1.25% per year. The big difference is in the ALTVI account. The TVI (Called the Trader Vick) is a diversified futures account created by RBS. The account is run on a 5 year point to point with 100% of gains credited to the accumulation value after 5 years. In normal english, you put money in year 1 and then at the end of year 5 you get any interest gains.
This allows for much greater growth potential than can be achieved with the conventional fixed indexed annuity. The gains are also stacked on top of the guaranteed 4% annual growth of the death benefit rider or income rider if they are chosen.
Which is better?-The new product clearly offers big advantages with accumulation growth.
It is important for most retirees to create additional income streams in addition to social security in retirement. Many will rely on minimum distributions from qualified accounts (IRA’s, 401K rollovers, SEP plans, etc) and non qualified retirement plans to create additional income.
Retired couples will often only have one person receiving additional income. This strategy works well as long as the primary person drawing income is alive but an unplanned death can leave the surviving spouse short on income.
If the deceased spouse had substantial amounts of life insurance or other investments, the surviving spouse can use the proceeds to create their own income stream. Unfortunately, the odds are that the deceased spouse would not have an adequate amount of life insurance to allow for a new income stream to be created.
Using a joint income option is a great way to protect both members of the couple in the event the other passes away.
There are now a number of companies that provide very strong payout options. Most will offer guaranteed income numbers that will increase in the deferral phase prior to turning income on. The payment will not expire until the death of both members.
A number of companies offer joint payouts and the highest paying company changes often. The current leader in this type of contract is Security Benefit. They currently offer the highest single and joint payout in the field.
We will use a 61 year old male and his 61 year old wife as an example. Assume they have saved up $200,000 to supplement retirement. If they defer the money for 5 years, Security Benefit will pay them a Joint lifetime income of $16.186.00 a year guaranteed. This represents over an 8% joint payout percentage. If the defer for 7 years, the income would go up to $20,000 a year putting the payout at 10%.All payouts are projected on a guaranteed basis making it easy to plan for future income needs.
There is no doubt that a new company will counter with a higher payout at some point but for now, Security Benefit is the clear leader.
With licensed sales professionals in both the investment and insurance fields, the experienced and knowledgeable team at Crowe & Associates can tend to your various needs.
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