Momentum Wealth introduced a blend of life and living annuities, providing financial advisors with a powerful tool. Retirees can now combine these annuity types for maximum benefits. A living annuity is subject to market volatility, while a life annuity offers a guaranteed payout for life.
For the longest time, life and living annuities were used as separate products. Each had its advantages and downsides. Momentum Wealth upended the market by introducing a blend of the two, giving financial advisors a powerful tool to better assist clients. Some retirees may have one of these annuity types or both running in parallel but are unable to enjoy the full benefits of combining them under a single umbrella.
A living annuity is linked to investments such as unit trusts, cash investments, or share portfolios and is, therefore, subject to market volatility. The client assumes the market risk and needs to pace the drawdown rate to ensure the funds last as long as possible. If the market drops, the client’s capital and potential income drops. A key benefit of the living annuity is the ability to bequeath any remaining value to your heirs. The difference with a life annuity is that there is a guaranteed payout, often monthly, and that payout continues for as long as you are alive
Life Annuity Living Annuity Financial Advisors Retirement Market Volatility
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