annuity
When Is the Right Time to Have the Income Annuity ‘Talk’? hen clients reach the age at W which they need to start taking RMDs from other retirement plans, that’s the trigger for starting a discussion on income annuities. By Linda Koco
W
hen do most advisors start talking with clients about income annuities? Quick, grab a pencil and jot your answer. Then read on. Executives from CANNEX USA say the prime time for today’s advisors to have “the talk” is when clients reach their late 60s or early 70s. This is not accidental, according to 42
CANNEX President Gary Baker. When people turn age 70 1/2, they must, under U.S. law, start taking required minimum distributions (RMDs) from 401(k)s and other deferred compensation retirement plans they may hold. That drives consumers to their financial advisors for help with the RMD calculation, and that in turn drives advisors to ask their clients about other income sources. Pretty soon, advisors start hitting up the payout annuity database at CANNEX to find out about income annuity products and features available to meet the customer’s need. A new report on advisor activity on the CANNEX database shows that the average age of potential income annu-
InsuranceNewsNet Magazine » March 2013
ity buyers, as inputted by advisors in 2012, was the pre-RMD age of 69.1. (For women, the average was 70.5, and for men, 68.1.)
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Baker believes that the 69.1 average age is significant. The late 60s and early 70s represent the time of life when many people start intentional income planning, he points out. What happens is that the RMD gets people to sit down with their financial advisor, to find out how much they must withdraw under government rules. “Clients put their papers on the table, the advisor answers the RMD questions, and then the advisor starts checking to