What really determines happiness for your clients in retirement?
While portfolio performance often dominates planning conversations, the foundation of retirement security lies in guaranteed income that clients can never outlive—regardless of market conditions or economic uncertainty.
Modern annuities can offer that security and help address specific demographic challenges that advisors face today.
Here are four innovative ways to rethink annuities in your comprehensive retirement planning approach:
1. Focus on Stability, Not Excitement
The most effective advisors understand that annuities may not be the most exciting products, but they do provide unshakeable stability that enables excitement elsewhere in the portfolio and dependability for long-term income.
Lifetime income annuities create a foundational layer that helps remove three critical risks from your clients’ retirement equation: sequence of returns risk, cash flow risk, and longevity risk. This predictable, guaranteed income stream essentially creates a personal pension plan that continues regardless of market volatility or interest rate fluctuations.
Think of annuities as the stabilizing force that allows you to pursue more aggressive growth strategies with other portfolio components. When clients know their essential expenses are covered through guaranteed income, they can better tolerate volatility in their growth investments. This psychological comfort often leads to better long-term investment behavior and outcomes.
As Dave Alison, CFP®, EA, BPC, President and Founding Partner of C2P explains on The Bucket Plan® On Demand podcast: the key insight here is positioning:
“It’s not the vehicle itself—it’s what you do with it that matters.” – Dave Alison
2. Address Women’s Unique Longevity Challenges
Through one of our A Women’s Clarity® forum discussions, we’ve identified specific retirement planning challenges that make annuities particularly valuable for women clients. As Ashley Ilardo from Dimensional Fund Advisors shared, women outlive men by an average of five years, but half of all widows over 65 will outlive their husbands by an additional 15 years. Even more concerning, as Tiya Stanley from F&G pointed out, 70% of nursing home residents are women.
These longevity realities create specific financial pressures that advisors must address. Women experience a longer “health span-lifespan gap”—averaging 13.73 years compared to 11.08 years for men—meaning they typically require long-term care services for extended periods. Additionally, women often face career interruptions for caregiving responsibilities, resulting in lower lifetime earnings and reduced retirement savings.
Modern annuity solutions directly address these challenges through innovative features designed for extended care needs. It varies by state but as Tiya explained, many current F&G products offer immediate access to 100% of accumulation value for terminal illness, home healthcare, or nursing home needs. Advanced income annuities can double payments when clients cannot perform two of six activities of daily living, with some products continuing this enhanced benefit until the cash value reaches zero—not just for a limited five-year period.
For women clients who prioritize aging in place and maintaining financial independence, these features provide crucial protection while preserving dignity and choice in their later years. Rather than depleting assets to pay for care, properly structured annuities can enhance income precisely when care costs peak.
[Related: Best Ways to Discuss Life Insurance Strategies for Women]
3. Adapt to Today’s Economic Environment
The current economic landscape presents unique opportunities for annuity implementation that didn’t exist a decade ago. Interest rate environments, inflation concerns, and market volatility patterns all influence which retirement income tools provide optimal value for your clients.
Today’s environment requires flexibility in your planning approach. The products and strategies that worked effectively in previous decades may not address current economic realities. Smart advisors recognize that every financial vehicle has specific jobs it can accomplish, and the key is matching the right tool to the current economic conditions and individual client needs.
This adaptability becomes particularly important when considering how economic factors affect different demographics. Women’s longer retirement periods mean they’re more exposed to inflation risk over time. Current annuity products with built-in inflation protection or growth potential can help address this extended exposure while maintaining the guaranteed income foundation.
The most successful advisors avoid being anchored to past approaches and instead evaluate how current product innovations can solve today’s specific challenges within a holistic planning framework.
As Kalem Mackey, CFP®, BPC explains on an annuity themed episode of The Bucket Plan® on Demand podcast:
“I know there are some advisors out there that may have been burned by certain products or companies in the past. But there’s just so much innovation in the annuity space. The products that are available today are so much more client-centric than they were 10, 15, 20 years ago.” – Kalem Mackey
[Related: 3 Key Strategies to Help Guide Clients Through Market Volatility]
4. Consider Them as a Bond Replacement
In today’s interest rate environment, lifetime income annuities offer compelling advantages over traditional bond allocations, particularly for clients seeking more liquidity and flexibility in their fixed-income allocation.
Unlike bonds, which can lose value when interest rates rise, lifetime income annuities provide guaranteed payments that continue regardless of market conditions. Many current products allow additional withdrawals without penalty or surrender charges, providing liquidity that bonds may not offer during market stress periods.
The diversification benefits extend beyond simple asset allocation. By transferring longevity and market risks to insurance companies—entities specifically designed to manage these risks—you’re moving beyond the traditional three-asset-class portfolio of cash, bonds, and equities. This risk transfer can be particularly valuable during volatile market periods when rebalancing opportunities arise.
For clients with significant bond allocations, substituting a portion with lifetime income annuities can provide better downside protection while maintaining income generation. This approach offers true diversification by adding an asset class that doesn’t correlate with traditional market movements.
[Related: A Bucketing Approach to Strategic Asset Allocation]
Putting Client Interests First in Annuity Planning
Modern annuity products have evolved significantly, offering more client-centric features and improved transparency that make them viable solutions for challenges that couldn’t be addressed years ago. However, the decision to recommend annuities should always reflect what serves your clients’ best interests rather than how your practice structure or compensation model works. The most successful advisors focus on comprehensive needs analysis and present all options transparently, even when the recommended solution doesn’t optimize advisor compensation. Building a practice around this type of client-first planning philosophy consistently leads to stronger relationships, increased referrals, and better business outcomes.
[Related: How to Provide Exceptional Wealth Management for High-Net-Worth Individuals]
Building a More Comprehensive Advisory Practice
Ready to transform how you approach retirement income planning? The strategies discussed in this article—from guaranteed income foundations to addressing women’s unique needs—all work together within a comprehensive planning framework.
The Bucket Plan® 1.0 Training teaches you to seamlessly integrate annuities and other income solutions into a time-segmented approach that clients appreciate and understand. Instead of overwhelming clients with complex product features, you’ll learn to position guaranteed income within the Now, Soon, and Later bucket structure that addresses sequence of returns risk while creating genuine client confidence.
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Hear from industry specialists on annuity innovations, longevity planning strategies, and practical applications for comprehensive retirement income planning.
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The information provided is for informational and training purposes only. The information was accurate as of the time the material was created. Tax laws and rulings can frequently change. Please discuss the client’s current situation with an accountant or tax advisor.
