A Super Stack Of Retirement Income

A Super Stack Of Retirement Income Image

by Chris Conroy Vice President, Advanced Marketing

Legend has it that Paul Bunyan ate 50 pancakes in one minute because he loved the food and was so hungry from digging out the Great Lakes. How would your clients like a super stack of “retirement pancakes” that serves higher lifetime income checks on all the hard-earned money they’ve saved throughout their lives? The new BalancedAllocation Lifetime Income RiderTM (BALIR) from Annexus, available only on the BalancedAllocation Annuity (BAA) series, does just that. It offers your clients a new living benefit rider that stacks interest tied to the S&P 500 on top of a 5% guaranteed fixed rate, which in turn means higher income checks for life. The Retirement Landscape

Many of your clients come to you to help solve retirement challenges, hopeful that you can provide a recipe for looming retirement fears such as market volatility, increased healthcare costs, higher taxes or social security trust fund woes. As we know, suffering bear market losses at the time of entering retirement can devastate a retirement portfolio, and many Boomers were dealt this blow with the 2008-2009 “Great Recession.” This problem is often referred to as the sequence of returns risk. (Contact your Sales Consultant for access to our November 2011 webinar and whitepaper for more on this topic).

More importantly, many of today’s seniors fear they will outlive their retirement nest egg. Addressing this longevity risk concern became simpler with guaranteed lifetime income benefits. According to the 2000 mortality actuarial tables, half of all couples age 65 can expect to see at least one person live to age 92, and one in four couples will see at least one live to age 97. The message is clear: clients need guaranteed lifetime income – not just an income for meeting a projected life expectancy.

Stacked Interest and Options for Income

With powerful products like the BAA combined with a rider as innovative as the BALIR, clients can watch their retirement income value grow at the same time their account value grows. The BALIR offers two income base crediting options: a 6.5% guaranteed fixed rate, or the Stacked Growth OptionTM (SGO) which adds interest earned in the BalancedAllocation Account Value plus a 5% annual benefit base minimum increase. The BAA product series features a patented crediting method blending a share of the S&P 500 index growth over two years with a fixed, declared rate. Note that a “spread” fee is only charged during crediting periods where the account saw growth; therefore, no fee is assessed when a client’s account earns zero interest. Many producers are looking to recommend the SGO for clients looking to defer income for a longer period in particular.

In addition, the BALIR benefit serves up an attractive Consumer Price Index (CPI-U) based payout option for clients wanting to hedge inflation risks with an increasing income payout during times of inflation. At the time of turning on the income rider, clients can choose which option best meets their needs – either a level income amount, or the CPI-based increasing income option which effectively provides a level buying power income. Assuming a historical inflation rate of 3.0%, it is expected that clients might see a greater CPI-based payout amount in years eight through 10, depending on age. Clients who are worried that inflation might spike higher can receive a larger income as early as year five if inflation runs 4.5%. While the CPI payout currently has a 10% per year maximum increase for a maximum of 30 years, this option is clearly a strong choice for those looking to use this income to pay for items such as food, healthcare, rent or other items that are tied to inflation.

Joe, Single, Age 50

Let’s take a more in-depth look at how the BALIR works. Assume Joe, age 50, plans to roll up his retirement income base for 10 years. Joe starts with $100,000 and allocates it to today’s 35%/65% blend of the S&P 500 and the declared rate respectively available on the BAA. At age 60, here’s how Joe’s annual lifetime income payments look using the fixed account or the stacked growth option:


Let’s assume Joe chose the SGO. Now, at age 60, Joe can consider his payout options – $9,313 per year for life or $7,243 paid out in year one with an annual CPI-based increase. Joe fears inflation might be 4.5% per year and needs lifetime income with level purchasing power to pay for expected daily living expenses. Therefore, he chooses the CPI payout, which will increase and exceed the level income option in year seven ($9,432). Over an 85-year life expectancy, Joe would receive nearly $90,000 more in cumulative payments in this scenario.

The BALIR combines the traditional strengths of Annexus products and boasts two new features that you’re certain to be hearing about from other leading producers. Packaging flexibility of roll-up options with the SGO and income payout options for those inflation-averse, Annexus’ BALIR is sure to get attention. Add on a strong two-year uncapped accumulation story, a 3% death benefit rider and an A-rated company that has operated continuously for 300 years, and you’ll see why this product is sure to satisfy clients. Call your Annuity Sales Consultant for additional ways to help your clients start stacking their “retirement pancakes.”

FOR AGENT USE ONLY.  NOT FOR USE WITH THE GENERAL PUBLIC. 12256 – 2012/4/3 | 19033 096242


The BalancedAllocation Lifetime Income Rider™ [BAAIR2 (10/11)] or state variation, an optional rider for which a charge is deducted, is issued by Aviva Life and Annuity Company, West Des Moines, IA and is not available without the purchase of the BalancedAllocation Annuity® [BAA8 (09/09) and BAA12 (09/09)] or state variation. Product features, limitations and availability vary by state. See the Disclosure Summary for details. Interest credited will be equal to the combined growth in the value of each allocation, less charges for any optional riders. Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.

Join the conversation