Headline news has been focused on proposed changes for the U.S. Social Security system.

     In the past, Americans could rely on a comfortable retirement thanks to guarantees supplied by the government. These government funds were supplemented with income from defined benefit plans funded by corporations.

     Today, things have changed and the responsibility for creating retirement income has shifted to individuals.

• Social Security provides less than 40% of retirement income to Americans and is likely to decrease even further (source: Social Security Administration, 2003).

• Employer defined benefit plans only cover 19% of households and existing plans are under distress from under-funding and corporate bankruptcies (Economic Policy Institute, “Retirement Insecurity”, 2003)

     Outliving savings is the #1 greatest retirement worry for most Americans. Unfortunately, 48% of Americans will retire with insufficient savings and no guaranteed income stream (LIMRA Spring 2004, MetLife 2003 Employee Benefits Trend Study).

     Sound planning and careful investing can help you build the assets they need to achieve their retirement goals. Variable annuities may be a viable option to help you prepare for retirement and create a guaranteed income stream.

      In addition to helping save for retirement, variable annuities can offer various guarantees to help protect your investments. These range from:

• Protecting the principal in the event of a market downturn, to
• Providing guaranteed payments for as long as your clients live, to
• Offering financial benefits to clients’ beneficiaries
  

     These guarantees usually require additional fees and are subject to the claims-paying ability of the insurer.

This might be suitable for:

• Baby Boomers born between 1946 and 1964 with long-term investment horizons and interest in developing a retirement strategy.

• Pre-retirees who have already maxed out their 401(k) and IRA contributions, but are still looking for a tax-deferred investment.

• Anyone with high amounts of uninvested cash.

• Anyone wanting principal guarantee.

 

     Principal Guarantee allows you to receive, over a period of time, every penny invested, regardless of what has happened in the market.

     After a specified number of years such as three years, Principal Guarantee allows you to receive 100% of the amount invested if they withdraw no more than 10% of the amount invested annually over 10 years (5% annual maximum if a withdrawal is taken in the first three contract years).