Description
Over the past few years, annuities have become popular retirement planning products. As the need for lifetime guaranteed income grows -- and as more consumers recognize this need and realize that Social Security may fall short of fully meeting it -- more and more producers are including annuities in their product portfolios as a means to meet today’s retirement objectives. As a result, more and more consumers are adding annuities to their retirement plans. Though annuities have been around for centuries, many see them as a new way forward for today’s retirement market.
With this growing market for annuity products comes greater producer responsibility for client education. It’s one thing to understand and explain a product’s features and functionality; it’s another thing entirely to be able to place the product into a client’s hands with confidence that not only will the product serve the client’s needs but that the client grasps how the product works, how it will perform, and what his or her responsibilities are with regard to its operation.
Annuities are complex. It’s imperative that producers are able to advise their clients not only on the features and functionality of these products but how they can and should be used in order to take full advantage of the benefits they offer and avoid certain negative consequences. It’s one more way that producers can boost their clients’ retirement readiness.
Learning Objectives
This course explores a narrow but important topic: how to avoid unnecessary penalties and fees on annuity withdrawals. This is not a topic that a consumer is likely to understand or even be aware of; he or she must rely on the guidance and advice of a knowledgeable producer. Upon conclusion of this course, students will understand:
• The basic principles of annuities and the different types of annuities
• How annuities can generate income
• Annuity benefits and drawbacks
• How an annuity’s lack of liquidity can be mitigated
• How to avoid the common surrender charges insurers impose on their deferred annuity products
• The tax implications of taking withdrawals from annuities before the age of 59½
• How a substantially equal periodic payment plan (SEPP) can be used to avoid early distribution penalties, and how the variable factors can be manipulated to meet client needs
• The importance of educating clients with regard to the “do’s and don’ts” of annuity withdrawals and distributions