Written by: David Wood 

It used to feel like retirement planning was built on a straightforward equation: save diligently, invest wisely, withdraw prudently and the math would take care of itself. But the assumptions that shaped these concepts — shorter retirements, steadier markets, predictable yields — have changed.

Today, the old rules don’t always hold up under real-world stress. And clients are forced to make tough decisions, such as:

“How can I maintain my lifestyle and still leave a legacy for my family?”

That’s why more financial professionals are turning to protected income solutions — not as a replacement for investment portfolios, but as a stabilizing force to make the numbers more predictable, give you options for growth and preserve your legacy — all in a clearer, more efficient way.

A simpler approach to making the math work — with accuracy and ease

Let’s take a look at four places where the old rules break down, and how protected income and legacy solutions help to put the plan back on solid ground.

Problem #1: Stressing over stress-testing the 4% rule

If you’ve been in this business long enough, you’ve probably heard the same rule of thumb passed around for decades: just take 4% and you’ll be fine.

These days, the problem is a lot of people are saying that 4% is too low, and a lot of people are saying that 4% is too high.

The bottom line is, the rule creates uncertainty, both for financial professionals and clients. We’re living longer. Markets are unpredictable. And very few investors have pensions backing them up. A guaranteed income stream with a fixed indexed annuity simply removes this uncertainty from the conversation. Clients can take well over 4% each year, and still be assured of a lifetime income. It takes the guesswork out of withdrawals.

Problem #2: The spousal age-gap quandary — solved with one simple strategy

Plenty of households have spouses with a few years (or more than a few years) between them. It can create some planning complications, but a thoughtful approach to joint income can help solve for that. You can make sure that the payout is designed to last the lifetimes of both spouses.

This means the younger spouse may be able to retire earlier, so both can enjoy retirement together and still be protected for the long haul. The income is built to last as long as either spouse needs it, and allows both spouses to breathe a little easier knowing they are both covered.

A complex problem, solved with one built-in solution.

Problem #3: RMDs - Required doesn’t have to mean disruptive

Clients don’t really like being told when they have to take money, and they don’t like feeling like they are pushed around by tax rules. If markets are falling, it makes these emotions even worse.

A protected income framework can help smooth out the bumps in the process. That’s because income from the annuity counts towards RMD requirements. Retirees can meet IRS rules without derailing their plan — it’s just one simple set-it-and-forget-it step.

Additionally, if clients were planning on leaving a legacy for their loved ones, a refillable death benefit can help ensure that the original asset is there, even after years of forced income after age 72½.

Problem #4: The math needs to keep adding up with continued growth potential

Now, let’s talk about growth, because protection doesn’t mean giving up on performance. If a client elects a refillable death benefit, it’s important to keep the growth machine humming away in the background, helping the account value slow the impact of withdrawals. While their account value is 100% protected from market loss, income will deplete assets over time, but as long as the account value remains above $0, their death benefit is secure.

Fixed indexed annuities can give you access to a broad range of growth strategies, and exposure to tracking the S&P 500, Nasdaq and even highly regarded ETFs.

We have two truly unique approaches that I’d like to highlight:

First, clients can elect to track Capital Group Dividend Value (CGDV) ETF through a participation account. Offered by one of the most trusted asset manager brands among financial professionals, CGDV has a Medalist Gold rating from Morningstar and has outpaced the performance of the S&P 500 and 99% of the other ETFs in the Large Value category since inception.

Second, clients can find growth in up, flat — and even down — markets with our dual trigger account. In a flat or up market, they will lock in their full amount, and even if the market is down a few points year after year, they may still have growth opportunities.

Growth without downside exposure is a simple, yet powerful combination at any stage of the retirement planning process.

Lifetime income. Legacy-changing outcome.

Take a closer look at the math, and run your own numbers, with Lincoln fixed indexed annuities. Check out the details and run your own numbers.

Math that adds up to 100% protection in all phases of retirement

We need to plan for all three phases — growth, income and legacy — without guessing which old rules still apply. It’s about building a framework that can withstand real-life challenges simply, clearly and reliably. When you pair protected lifetime income with structured growth and thoughtful legacy features, you can help clients feel at ease, not just in the math, but in the outcomes.

That’s the new retirement math: Less uncertainty. More confidence. And protection that helps bring everything together.

Our team would love to discuss these strategies with you, just contact your Lincoln representative at 877-533-0265.

To learn more, please visit Blogs | Lincoln Financial.

Related: Americans Are Living Longer Than You Think – Are You Prepared?

About the Author:

David Wood is currently a Vice President overseeing fixed and indexed annuity sales, leading the Brokerage Channel distribution team at Lincoln Financial Distributors. He joined Lincoln in 2007, starting on the inbound desk in Greensboro, N.C. Over the past 19 years he has held a variety of roles supporting clients within Lincoln’s annuity division.

He is a graduate of North Carolina State University and resides in Greensboro, N.C., with his wife and two boys.

 

Lincoln Financial is the marketing name for Lincoln National Corporation and its affiliates. Affiliates are separately responsible for their own financial and contractual obligations.

Lincoln fixed indexed annuities (contract form ICC25-000702 and state variations) are issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, and distributed by Lincoln Financial Distributors, Inc., a broker-dealer. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so.

Contracts sold in New York are issued by Lincoln Life & Annuity Company of New York, Syracuse, NY, and distributed by Lincoln Financial Distributors, Inc., a broker-dealer.

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