Safe Money Opts, Bond Alternatives, HNW Planning

Interest rates have rapidly risen in the last 2 months.  If your clients are holding cash and not ready to commit it to the market, they can park it for a while.

Fixed MYGA rates available today:

3 years- 3.5%
5 years- 3.8%
7 years- 4%

For those who want to park their money somewhere safe to protect their downside and have upside potential when the market rebounds, consider an indexed annuity.  As the market is falling, carriers are increasing their participation and cap rates.  This allows your client to protect their money from any losses and participate in some of the earnings when the market goes back up.

Avoiding a bad sequence of returns near retirement

Clients near retirement are currently experiencing a bad sequence of returns, and some may never rebound.  Wade Pfau recently published an article discussing the use of deferred annuities with an income rider to reduce this risk.

Sequence of Returns Risk in Retirement

Clients who don’t want to commit to an income rider today, can protect their money with a fixed/indexed annuity now and decide how to deliver an income when ready. Our Client Chronicle™ discusses a successful client situation for this two-stage approach.  Nelly protected her money and then decided to turn it into a guaranteed income later.

Client Chronicle™ – Protect, Guarantee & Decide Later

Bonds in a rising interest rate environment

Many are turning to fixed and indexed annuities to reduce the bond exposure in a portfolio. Below are links for advisor & client-orientated insight to this strategy.

The Fixed Income Dilemma (Advisor)

Fixed Indexed Annuities – An Alternative Income Solution (Client)

Life insurance for HNW clients

Annuities are best used to drive an income.  When legacy planning, life insurance may be a better bond alternative for your HNW clients.  To learn how HNW clients are incorporating life insurance into their protection and legacy planning join us on our next CFP® CE presentation held on June 1st, 2022.

Learn more & REGISTER HERE

Posted in