Many adults approaching retirement age have little to no retirement savings. In fact, the U.S. Government Accountability Office said that almost 50% of households headed by someone aged 55 and older had no retirement savings in 2016. And as the retirement age for Social Security rises, and inflation hits wallets across the country, it’s understandable that many older adults worry about paying for their living expenses once they retire.
To help solve this issue, one fund innovator has teamed up with the world’s fourth-largest asset manager to deliver a lifetime income generator for retirement. Annexus Retirement Solutions has created a cutting-edge retirement product that aims to provide plan participants with as much as 6% income–for life. Here’s what you need to know. (A financial advisor could help you plan for retirement and help you select investments that align with your financial goals. Speak to a qualified advisor today.)
Retirement Fund Innovator Announces New Lifetime Income Solution
At the end of March 2022, Annexus Retirement Solutions announced a new, strategic partnership with the world’s fourth-largest asset manager, State Street Global Advisors, to develop a lifetime retirement income solution for defined contribution plan participants. Combining a target-date retirement fund with fixed indexed annuities and a guaranteed lifetime withdrawal benefit, the new product will be Annexus’ second product offering that leverages its patent-pending Lifetime Income Builder.
“Until Lifetime Income Builder, industry attempts to deliver in-plan lifetime income largely relied on … products that weren’t optimized to meet participants’ needs,” said Dave Paulsen, chief distribution officer for Annexus Retirement Solutions, in a press release. “That compromised approach created unnecessary complexities and required participants to sacrifice returns and a measure of flexibility and control to receive guaranteed income.”
Many retirement savers may be familiar with the popular target-date fund, usually through their employer-sponsored retirement plan. While offering a simplified, tax-advantaged retirement solution, target-date funds are still subject to the ups and downs of the markets. However, by adding fixed indexed annuities, which offer growth potential and protection from down markets, to the familiar target-date fund, plan participants will be able to benefit from a retirement solution that can accrue tax-deferred interest and offer a fixed income during retirement.
One lingering concern about this product is portability, or the ability for workers to move from one platform to another. In order to address this, Annexus provides access to its Annexus Retirement Data Exchange, which enables streamlined communication and administration between recordkeepers.
