Clients Need $50k in Income? 4 Innovative Options

September 5 2019

by CreativeOne -

It’s a familiar scenario for any financial advisor who works with retirees.

You sit down with a couple who has saved a significant amount of retirement assets over the course of their career. As they approach retirement, they’re looking for a way to convert those assets into income that will last for life.

CreativeOne Sales Consultant Butch Boley has helped many advisors navigate this very scenario. In a recent webinar, he shared four strategies that he is using right now to help advisors generate lifetime income for their newly retired clients.

In the webinar, Butch used a sample 65-year-old couple as an example. The couple has approximately $1 million in retirement assets and would like to generate $50,000 in annual income. Below are four innovative strategies Boley is currently recommending to advisors:


Strategy 1: Single Premium Immediate Annuity

This option is certainly familiar to any advisor who has experience with annuities. Single-Premium Immediate Annuities (SPIAs) have been around for decades. They offer a reliable, guaranteed stream of income for life.

As Butch explained in the webinar, the current interest rate environment makes SPIAs less attractive than they have been in the past. Butch compares all SPIA carriers to find the best payouts. In this scenario, the best option was a SPIA that required $909,000 to generate $50,000 a year in joint income for a 65-year-old couple.


  • SPIA provides guaranteed income for both lives.


  • Client has no control over or access to premiums.
  • There is no growth opportunity in a SPIA. Income is fixed for life.


Strategy 2: Fixed Indexed Annuity with a Lifetime Income Rider

The second strategy is also likely familiar to those who frequently use annuities. Butch suggested using a fixed indexed annuity (FIA) with an optional lifetime income rider. Fixed indexed annuities offer upside growth potential without downside market risk. A lifetime income rider offers a withdrawal that is guaranteed for life, regardless of how the annuity performs.

In this scenario, Butch was able to find a policy that can generate $50,000 in guaranteed annual income for both lives for $905,000 in premiums. There is an annual fee that is deducted each year for the income benefit. That fee ends when if the contract is ever depleted. However, the income continues for life, regardless of how the annuity performs.


  • Income is guaranteed for life regardless of annuity performance.
  • FIAs offer growth potential without downside market risk.
  • Ability to take extra income if needed under the excess withdrawal provision.


  • Annual fee of 1% or more for lifetime income rider.


Strategy 3: FIA Split

The third strategy Butch presented involved the use of two separate FIAs. The hypothetical couple contributes $500,000 into the Athene Agility FIA, which offers a lifetime income benefit at no additional charge. Another $415,000 is contributed to the Nationwide New Heights annuity.

Under this scenario, the couple withdraws the free withdrawal amount – $50,000 per year – from the Athene annuity for the first 10 years. During this period, there are no withdrawals from the Nationwide annuity. That allows the income base to roll-up and increase the guaranteed income amount.

After 10 years of $50,000 annual withdrawals, the Athene annuity is depleted. However, the policy’s income guaranteed still allows for a guaranteed annual withdrawal of $3,438 per year.

At this time, the couple begins to take guaranteed withdrawals from the Nationwide annuity. Remember, the income base has been increasing for the previous 10 years, so the income amount is up to $50,578 per year. That gives the couple a total guaranteed annual income amount of $54,016 starting in year 11.

This option meets the couple’s income objectives and allows for growth potential. It also achieves these goals for 60% less in fees than Strategy 2.


  • Provides $50,000 in annual income for the first 10 years, with a raise to $54,016 starting in year 11.
  • Upside potential in both contracts.
  • Athene’s no-fee income benefit reduces total fees by 60% compared to Strategy 2.


  • Possible administrative inconvenience of managing two separate contracts.


Strategy 4 – Multi-Year Guaranteed Annuity Ladder with Income Rider Split

Butch’s fourth option is complex, but it also offers some intriguing benefits. In this scenario, they couple three multi-year guaranteed annuities (MYGA), also commonly known as fixed deferred annuities, with varying interest rates and durations. These policies are combined with a fixed-indexed annuity with a lifetime income rider.

The MYGAs include a three-year policy with a 3% annual interest rate, a four-year with a 3.05% rate, and a five-year with a 3.92% rate. The couple contributes $371,000 into the five-year policy. They also contribute approximately $55,000 into each of the other policies, for a total contribution of $482,229 into the three MYGAs. The couple also contributes $616,335 into an FIA with a lifetime income rider.

During the first five years, the couple meets their $50,000 income goal by taking withdrawals from these three MYGAs. The withdrawals are structured so the three-year contract is completely depleted at the end of its period. The same is true of the four-year contract. No money is withdrawn from the FIA, which allows the income base to grow.

However, the five-year contract still has a balance of $326,529 at the end of its period. Since the contract is out of surrender, the couple is free to use that money as they wish.

Starting in year six, the couple starts taking income from the FIA. Because the income base has grown for five years, they can now take $50,000 per year. That income is guaranteed for life, regardless of how the policy performs.

The couple meets their $50,000 annual income goals. While they had to initially contribute more than $1 million, they get $326,529 back at the end of year five. That brings their net investment down to just over $700,000, making this the most affordable of the four options presented.


  • Takes the least amount of net premiums to achieve income goals after you consider the return of $326,529 after year five.
  • The FIA has growth potential with no downside market risk.
  • The FIA offers excess withdrawal premiums in case extra income is needed.


  • This strategy requires the management of four contracts and careful distribution planning.

The annuity landscape is changing all the time. Butch Boley and CreativeOne’s other knowledgeable Sale Consultants can help you find the right policies and strategy for your clients.


Ready to present creative, thoughtful income strategies to your clients? Let’s talk about it.


Contact our team today at 800.992.2642.

Related terms: Annuities, Sales Strategies

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