o_19grqq7snim9mn019q11f7ds26a.pdf

y judy magness
ANOTHER LIFETIME
INCOME SOURCE
"Take the Risk Out
of Retirement"
In 2013, the U.S. Government Accountability Office
released a report recommending that Americans
convert their cash-balance defined benefit pension
plans into lifetime income annuities, rather than take
a lump-sum payment upon retirement. This report,
“Ensuring Income throughout Retirement Requires
Difficult Choices,” warned that Social Security payments
most likely will not provide sufficient income
replacement. It further advised most Americans to
convert at least half of their cash savings into annuities
offering lifetime income guarantees.
This bit of advice
from a non-partisan
federal agency
charged with reducing
wasteful government
spending and providing
financial savings advice
to Americans, sounds
similar to the advice Jan
Gleisner, president of Belvedere
Insurance Agency
in the San Diego, California,
area would give.
The only difference is
that Gleisner adds any
type of retirement savings
plan to the list of accounts
for which prudent
retirement preparation
dictates moving assets
into annuities featuring
lifetime income guarantees.
“The U.S. Department
of Health and Human
Services came out with a
study in which only four
of every 100 Americans
can afford to retire and
keep their standard of
living based on the income
streams they have
prepared for their retirements,”
Gleisner said.
“That means 96 of them
cannot afford to retire at
their current standard of
living level. It is why we
see people at age 70 still
working at places such as
Wal-Mart – because their
retirement savings plans
have failed.”
He isn’t advocating a
complete departure from
the stock market. But he
is a proponent of a paradigm
shift that is quickly
gaining ground among
Americans preparing for
the golden years who
have the losses sustained
in the Great Recession of
2007 to 2009 still clearly
imprinted on their financial
minds. It’s a changing
mindset that stock
market investment alone
is not a fail proof method
for securing adequate
funds for retirement.
The increased use of annuities
with guaranteed lifetime
(income) benefit riders is a
trend backed up by statistics
from the Life Insurance and
Market Research Association
(LIMRA), a Windsor, Connecticut-based
worldwide research,
consulting and professional development
group representing
more than 850 insurance and
financial services companies
in 73 countries. According to a
2012 LIMRA study, purchase
of GLB (Guaranteed Lifetime
Benefits) within annuities is
gaining in popularity. GLB riders
were elected on nearly $8 of
every $10 of the more than $83
billion of variable annuity purchases
in 2012. For indexed annuities,
$3 out of every $4 in the
more than $23 billion in sales
represented a GLB option exercised.
The Indexed Annuity
Jan Gleisner,
President of Belvedere Insurance Agency
seems to be the better choice of
the two as the client can usually
get a higher amount of guaranteed
lifetime income compared
to the variable annuity.
These are encouraging numbers
for Gleisner, who said that
once clients become aware of
this option, they are interested.
“Previously, they were not
aware of it because they have
just been going down this
paradigm of investing in their
401K or IRA and not knowing
there is another paradigm –
that there is another option,”
Gleisner said. “The good news
is for those who are open to it,
this represents a way to create
a low stress source of lifetime
income.”
12526 High Bluff Drive, Suite 300
Del Mar, CA 92130
www.belvedereinsurance.com.
THE SUIT MAGAZINE p.69