It seems so much more than 8 years ago, when income brokers within Fixed Indexed Annuities (FIAs) provided guarantees that were never offered. Historical rates of increase in revenue value that were as high as 8% are now being outpaced by no cap strategies. To me, it’s amazing to see how the evolution of revenue planning has redefined itself, especially in less than a decade. Today, more financial professionals are redirecting retirement funds to AIFs that provide growing income streams, as well as unlimited strategies, for life. Depending on when you plan to retire will determine which income growth strategy may be best equipped to meet your needs. That’s why it’s important to work with a professional who specializes in income planning solutions.

Gone are the days of annual FIA point-to-point strategies that can only provide a 3.0% return, and bon voyage. Through many of today’s specialized index strategies, policyholders within an FIA can now participate in over 90% of the up market (within a pre-determined index strategy) with absolutely zero downside. This means that you can never lose your principal or interest earned in the future, regardless of how the market performs. As this latest recession has shown, principle protection in falling markets is key to making your retirement a reality. These recent no-holds-barred strategies are causing more financial professionals to redirect client funds to missing collateral in a turbulent market. Depending on what your individual circumstances are (retirement timeline) will depend on which strategy best suits your needs.

Income payments within FIAs may be much higher than ever. Income account securities (non-cash securities) used to determine income payments may participate in up to 250% of the return of a selected index during the deferment. In addition, annual income payments can be increased by up to 150% of the same selected rate. For example, a particular AIF that has a 6% annual return (of a selected index) would result in an income payment increase of 9%, which would never decrease! In addition, each year that the selected index increases in value, the income will continue to increase by 150% respectively. Within a couple of these strategies, I have seen income payments potentially double over a 15-year period, while continuing to rise for life! These are income payments the likes of which have never been seen before, designed specifically to protect retirees from absent pensions and a bankrupt social security system.

So how did this evolution happen? Easy. In recent years, analysts have learned to maximize the upside potential within specific indices, while protecting the returns of the issuing company. Because of the extreme market fluctuations we’ve seen since 2008 (the most volatility since the Great Depression), statisticians and actuaries have been able to capitalize on market profit points, passing the profits on to the policyholder.

It remains to be seen where the evolution of revenue planning will end. I can tell you from personal experience that today’s potential income payouts and unlimited strategies were never contemplated 8 years ago. Today’s AIFs are replacing fears of inflation and market declines with comfort and predictability. Now, finally, retirement can be planned with a better quality of life than ever before!