How variable annuities can increase income

Navigating the new retirement landscape

Creating sustainable retirement income is more complex than ever. Today’s financial landscape is volatile, pensions are much rarer, and longevity has increased significantly.  Employers once shouldered the responsibility of helping their employees secure guaranteed retirement income. Now, it largely falls on individuals and their advisors. BlackRock’s research provides valuable insights into navigating this new reality.

Maximizing retirement with smart decumulation

Retirement planning transcends merely enhancing savings and maximizing returns. It’s about making informed decisions on how to convert those savings into a steady stream of income. Our goal, backed by VA Research, is to help balance income optimization with consistent consumption over time, helping to ensure that investors don’t outlive their savings.

Embracing our vision to redefine retirement, the BlackRock Retirement Insurance Team, in collaboration with BlackRock’s Retirement Solutions Team, has analyzed the role of annuities in improving retirement outcomes. Our research indicates that integrating variable annuities (VAs) into the retirement strategies you develop for clients can not only provide more predictable income but may also instill greater confidence in their financial futures.

Maximizing retirement resilience with variable annuities

Our findings, supported by VA Research, suggest that an allocation to variable annuities can effectively manage income variability and act as a safeguard against outliving savings. In certain scenarios, this strategy can generate a higher income compared to a traditional portfolio mix of 60% stocks and 40% bonds, leading to a more substantial cumulative income. Moreover, it enhances capital efficiency, offering further benefits in elevating client outcomes.