Bucket Strategies - Options for That 1st Bucket

[ScottLFB]

So I've run across a concept today and I wanted to see if Agents have been successful using this type of concept. Once in a while I run into Agents using Bucket Investment Strategies for their clients, typically this involves an FIA with an Income Rider for the 2nd bucket and allow that bucket to grow for 10yrs or so. The first bucket typically involves a SPIA or an Annuity that can be annuitized right away, but with SPIA rates being down we are trying to come up with alternatives.. We're using an FIA with a 10% premium bonus (immediately vested) that has a 5x5 annuitization structure. With this concept the Client takes the 10% penalty free withdrawals out for the 1st 5yrs and then annuitizes the remaining value over the 2nd 5yr period. With SPIA annuitization rates being around the 1-1.8% range, you give the client a potentially higher yield with the 5x5 structure on an FIA because the Accumulation Acct has the ability to grow over the 1st 5yrs with the investment allocations. Thoughts? Anybody currently working bucket strategies?

 

[TxsRang3r]

Scott,

With rates about to start falling SPIAs rates will continue to worsen. The NWL 5x5 with 10% bonus option (I assume that's what you're referring to) is pretty nice. If the client doesn't need income for yrs 1-5 we use the HArtford and Symetra DIA (delayed income annuity) concepts. They're basically SPIAs you defer for 13 months or longer. Some of the IRR on those are 4% or more which beats most SPIAs and GLWBs.

 

[golfnut]

The Hartford people are telling me the DIA is 2.3 to 2.7% depending on age, I heard the 4% figure mentioned at a FMO meeting, checked it out and found it it wasn't true, but I guess the commission is pretty good on the Hartford product, so FMO's are touting it....

 

[TxsRang3r]

Have you ran the Symetra DIA? I just ran one for an agent on here and the IRR was 3.77% Also, a 2.3-2.7% IRR compared to a SPIA IRR of 1-1.5% is 100% increase in IRR