Retirement Income Solutions

We offer several different strategies for generating retirement income. We'll start with the more common strategies and finish with a couple lesser-known strategies that are a little more sophisticated.

Common Income Solutions:

The immediate annuity – This solution is an insurance product that is guaranteed to make income payments for a specific period of time. Whether it is over a 10-year period, a 20-year period, or even over the remainder of your life, using an annuity like this is one of the safest ways to turn your retirement dollars into income. Always be sure to work with a highly rated insurer because your income payments are only as safe as the underlying insurance company.

The deferred annuity – Perhaps you'd prefer to keep your money safe from any potential stock market crashes, and rather than having an automatic monthly income, you'd prefer to simply withdraw money from your retirement account on an as-needed basis. A deferred annuity is a good option in this case. It earns interest and allows you to withdraw a certain percentage of the annuity's value (usually up to 10%) each year. It's safe, it's simple, and the money is there for you to take when you need it.

Bonds – Bonds can be a good solution for folks who want consistent income but do not want to spend down their retirement dollars. A bond will pay a fixed amount of interest for as long as 30 years (sometimes even longer). Interest payments can be mailed to your home or deposited right into your bank account. In recent years, the interest rates on bonds have been fairly low, so many investors are looking elsewhere for income.

A Lesser-Known but Effective Retirement Income Solution:

Option-Writing Strategy

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Principal Protected Structured Notes:

A structured note is a medium-term investment (usually 2 to 5 years in duration) that will typically earn its interest based on some underlying investment. A principal protected note is one where the worst-case return on your investment is 0%.

A hypothetical example would be a 4-year investment that earns a return equal to the S&P 500 index but is subject to a "cap" of 50%. This means that the investment cannot earn more than 50% over the course of 4 years.

Therefore, if the S&P 500 drops by 20% over the course of the 4 years, our client's initial investment is safe – they will simply earn 0% interest. If, however, the S&P 500 does fairly well over the 4-year period and rises by 20%, our clients will receive 20% interest at the end of the 4-year period. And if the S&P 500 does really well and goes up 100% over the 4-year period, our clients will receive 50%, the maximum they can earn based on the 50% cap described above.

These solutions can become quite complex – many of these investments are tied to commodities or even individual stocks. However, many come with FDIC insurance as well! For those who are looking to keep money safe but who want to have some opportunity for solid growth of their investments, these can be great solutions.