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ith advancements in medicine and technology happening all the time, it’s no surprise that life expectancies continue to rise each year. According to 2016 actuarial tables from the Social Security Administration, the average 65-year-old man is now expected to live to age 82 and the average 65-year-old woman is expected to live to age 85. Those numbers could change in the next five years or so, but the trend remains that life expectancies are going up. Living longer is a wonderful thing, but it introduces a unique risk to a retirement plan: longevity risk.

One of the ways to mitigate longevity risk is by securing fixed, guaranteed sources of lifetime income, such as Deferred Income Annuities (DIAs). A DIA allows you to buy income well into the future, unlike buying income now with the use of a Single Premium Immediate Annuity (SPIA). Income annuities create three efficiencies that other product solutions can’t:

1.

They allow for guaranteed lifetime inflation-adjusted income

2.

They are tax-efficient

3.

They eliminate fee-drag for assets used to generate income

You can also use DIAs in a ladder approach. This is when you buy multiple DIAs with different start dates. For example, one DIA could start at age 65, the next at age 70, and the next at age 75. This gives you INCREASING guaranteed lifetime income throughout your retirement! DIAs are a strong part of a laddered annuity strategy that can keep your clients financially secure for their entire retired lives. DIAs are talked about quite a bit in my book Retirement Income Masters: Secrets of the Pros. The book is divided into four parts: planning, strategies, solutions, and the role of the advisor. For each section, I have pinpointed the advisors who truly “get it.” They know how to plan for their client’s future. One of the masters that “gets” DIAs is Curtis Cloke. Curtis “accidently” discovered a DIA back in 1999 and quickly realized how beneficial they could be for providing guaranteed lifetime income to retirees. Curtis is still one of the biggest experts on DIAs today.

If you want to learn more secrets from Curtis Cloke and other industry experts, pick up a copy of Retirement Income Masters: Secrets of the Pros in my shop! Click here to pick up a single copy or click here to order a case of 30 books to share with your whole office.

See you on my next blog post,

-Tom Hegna