Diversified Annuities

March 11, 2025

Unlocking New Opportunities With FIAs In Today’s Market

Over the past decade, we’ve seen dramatic shifts in the interest rate environment, directly impacting the performance of annuity products.

Between 2018 and 2021, historically low interest rates resulted in lower Fixed Indexed Annuity (FIA) cap rates and modest fixed interest crediting strategies.

While these products still beat the fixed rate environment with market linked growth and protected assets, the growth they provided a few years ago pails in comparison to what is on the table with todays FIAs.

Fast forward to today, and we find ourselves in a much more favorable interest rate climate. Insurance carriers have responded by offering significantly improved FIA cap rates, participation rates, and even premium bonuses—an upfront boost that increases the cash value of a contract from day one.

The Power of Premium Bonuses

One of the standout features of many modern FIAs is the premium bonus. This bonus, which can range from a few percentage points to double-digit figures, is immediately applied to the contract value. For clients who may feel locked into an underperforming FIA from the low-rate era, this presents a unique opportunity. In many cases, the premium bonus can completely offset surrender charges, allowing them to exit an old contract without financial penalty and move into a more competitive, higher-growth potential annuity.

Why This Matters for Agents and Clients

For financial professionals, this shift in the market creates an incredible opportunity to revisit clients’ existing annuity contracts. With a complimentary annuity review, you can assess whether a client’s current FIA is still serving their best interests or if transitioning to a new product could provide them with greater growth potential, better guarantees, and enhanced benefits. Not only does this help clients maximize their retirement savings, but it also generates new business opportunities for agents looking to strengthen client relationships and expand their portfolios.

Take Advantage of the Current Market

If you or your clients hold an FIA that was purchased during the low-rate years, now is the time to explore options. A strategic annuity exchange could mean more earning potential, a stronger retirement plan, and greater peace of mind.

We offer a free annuity review service to help financial professionals evaluate existing contracts and determine the best path forward for their clients. Contact us today to see how you can leverage today’s improved annuity landscape to create better outcomes for your clients — and grow your business in the process.

March 4, 2025

Tax-Efficient Income And Principal Protection With Annuities

CPS Insurance Services

With the Federal Reserve’s interest rates at a 15 year high, fixed-rate annuities continue to offer the best tax-deferred guarantees available. A 60-year-old with $250,000 in after-tax funds can secure a guaranteed growth rate of 5.65% for 10 years — an excellent, fully guaranteed rate.

Annuity products also serve as an income source. By withdrawing interest, that same 60-year-old could generate $14,125 in gross annual income while preserving their initial $250,000 investment. After accounting for a 35% tax bracket, the net income would be $9,181.25 per year. While this is a solid option, a more tax-efficient approach can further enhance income using a split annuity strategy, which combines a fixed deferred annuity and a single premium immediate annuity (SPIA).

A More Tax-Efficient Approach

By strategically dividing the $250,000 investment:

$144,292.90 is placed into a fixed deferred annuity at 5.65%, ensuring it grows back to $250,000 over 10 years.
The remaining $105,707.10 is used to purchase a 10-year period certain SPIA, leveraging favorable exclusion ratios to minimize taxable income.

This SPIA generates $12,943.68 per year, with 82% of the income excluded from taxes as a return of principal. After taxes, the net annual income increases to $12,128.23, providing an additional $3,000 per year compared to simple interest withdrawals—all achieved through smart tax planning.

Maximize Your Clients’ Tax Efficiency

With tax season approaching, now is the time to introduce clients to strategies that optimize income while preserving wealth. Contact us today to explore more tax-efficient solutions that capture your clients’ attention and help them make the most of their financial future.

February 11, 2025

Growth Without Fear: Lock in Double-Digit Potential with Fixed Indexed Annuities

CPS Insurance Services

In today’s unpredictable market, retirees and pre-retirees face a difficult choice — pursue growth and risk losses or play it safe with minimal returns. But what if they didn’t have to choose?

Right now, top Fixed Indexed Annuities (FIAs) offer caps in the 12% range on the S&P 500, providing the potential for annualized returns of 8% to 10% — all while protecting principal from market downturns.

The Hidden Cost of Market Volatility

Market fluctuations impact more than just portfolios — they affect overall well-being:

Emotional stress – Watching retirement savings fluctuate can create uncertainty and anxiety.
Health risks – Financial instability has been linked to high blood pressure, heart disease, and depression.
Family strain – Retirement plan disruptions can create tension and difficult financial decisions.

FIAs: Growth Potential Without Market Risk

Fixed Indexed Annuities provide a balanced approach, allowing clients to participate in market gains without exposure to loss:

Zero Market Risk – Principal remains protected, regardless of market conditions.
Market-Linked Growth – Gains are tied to index performance, offering strong upside potential.
Locked-In Gains – Once credited, earnings can never be lost due to future market declines.

Help Your Clients Secure a More Confident Retirement

With FIAs, your clients can achieve growth without fear, ensuring a retirement strategy built on both opportunity and security. The best options in today’s market are highly competitive—now is the time to take action.

Contact your Annuities Associate for assistance on how you can give your clients peace of mind.