Opportunities within client portfolios

In today’s changing retirement landscape, diversified sources of retirement income may help you solve the challenge of constructing a portfolio geared toward income.

Finding income in today’s environment

Until 10 years ago, a 60/40 balanced portfolio could produce a 4 percent safe withdrawal rate. Yet in the current environment, that safe rate is likely under 3 percent1. Today, only 18 percent of Americans can depend on pensions for income within retirement, and the 0.3 percent cost of living (COLA) for Social Security in 2017 will likely get wiped out by increases in Medicare premiums2.



What role can an annuity play?

An alternative to fixed income vehicles: In the past, many portfolios used CDs or some bonds to provide retirement income at a lower level of expected risk than equities. Some annuities offer dependable income at a higher rate than those traditional instruments.

To help balance portfolio risk: Knowing a portion of clients’ income comes from an annuity may enable you to seek yield with more aggressive strategies elsewhere in the portfolio while respecting clients’ risk tolerance.

Another source of lifetime income: When added to Social Security, an annuity may provide additional income for clients facing longevity.

A form of tax diversification: By allowing assets to grow tax deferred, and even offering withdrawal strategies designed to reduce the impact of taxes, annuities can serve as part of clients’ overall tax management strategy.


Learn about our annuity solutions available for your clients

Or contact your Lincoln representative for more information about how dependable income may fit into your clients’ portfolios.

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1David Blanchett, Michael Fink and Wade Pfau. "Low Bond Yields and Safe Portfolio Withdrawal Rates." Morningstar, January 21, 2013.

2Dupont, Deb “Focus on Defined Contribution Plans: Role in Retirement Saving and Security.” LIMRA, 2014.