3 Essential Accumulation Questions Answered

Two Legacy leaders—Preston Pitts, CPA, FLMI, President; and Niju Vaswani, Chief Marketing Officer—respond to the most common questions we all want answered about accumulation.

1. In a modern fixed index annuity, which is more important: income or accumulation?

Niju Vaswani: Fixed index annuities were built on a foundation of accumulation, designed to capitalize on market returns without directly participating in market-related risk. When the economy experienced a sustained low interest rate environment in the 2000s, FIAs evolved; insurance companies shifted some efforts away from the accumulation story by introducing lifetime income riders and reducing minimum guarantees to the statutory minimum. As a result, many of the recent additions to the FIA marketplace have been centered on income riders rather than on the core value of an FIA: upside potential with downside protection.

While guaranteed income is a very important part of a sound retirement plan, the growth and safety aspect of an FIA has always been significant. Legacy’s mission first and foremost is to help consumers accumulate their wealth and protect it with strong minimum guarantees so they can enjoy the retirement they deserve.

Preston Pitts: The key to a successful retirement is balance. Studies show that 1 in 3 Americans have fewer than $5,000 saved for retirement.¹ These numbers indicate that for a majority of the population, accumulation should be the primary focus. After all, a person cannot realize strong lifetime income without first growing his or her nest egg. Only after consumers have addressed retirement accumulation, can income be addressed. Today’s fixed index annuities are unique retirement tools that balance the opportunity to grow and protect retirement wealth and create a lifetime income stream. With increasing life expectancies, many consumers need the protection of guaranteed lifetime income as much as they need to grow their retirement wealth. For those whose goal is to maximize payouts, Legacy has embedded a strong income value proposition within our product portfolio—including competitive joint payouts, a lifestyle payout option, and a no-cost income rider with step-up—without sacrificing the accumulation component.

2. How should clients allocate?

Preston Pitts: It’s important to consider your client’s needs and long- and short-term financial goals and objectives before recommending any particular FIA or index strategy. With every product Legacy develops, we put our dedication to innovation and sensitivity to consumer’s needs into the formula. The goal is that no matter the allocation, consumers can feel confident in the underlying minimum guarantee and growth potential of their selection. But to answer the question more directly, if I were buying a fixed index annuity today, I’d look for index strategies that demonstrate consistently strong results. Legacy has partnered with leading investment banks to create proprietary indices that are specifically designed to produce consistently above-average returns over the life of the annuity.

Niju Vaswani: One of my favorite index strategies to explain is a traditional option such as an S&P 500^® point-to-point strategy. One, everyone knows what the S&P 500^® is, which makes it simple to explain and accessible for clients to track. Two, it’s easy for people to understand that if the S&P goes up, they earn, and if the S&P declines, they don’t, but their money is still protected from loss. And three, the S&P 500^® has a significant history, so rather than relying on illustrations, you can tell clients about real results from real contracts. For instance, consider returns on LibertyMark^sm 10 FIAs from Americo Financial Life and Annuity Insurance Company. Clients who allocated to the S&P 500^® Two-Year Point-to-Point Strategy in 2016 realized up to double-digit returns in 2018, with crediting rates on their statements ranging from 5.35% to 31.04%.² How many FIAs deliver such strong accumulation, while now offering for new contracts a minimum guarantee of 1.60% on 100% of premium?³

3. Who should I look to as the leader of accumulation?

Niju: Legacy has always been on the forefront of innovation. We offer a highly diverse range of interest crediting strategies, providing clients more ways to diversify their money—from traditional methodologies to propriety indices to multiple ways to enhance rates such as rate banding and the option to buy up rates. For clients who feel the bubble is about to burst, we even offer a strategy that credits when the market declines. And it doesn’t stop there. We’re always seeking out new ways to maximize the client’s accumulation potential. Be on the lookout in the coming months for a game-changing new offering.

Preston: The Legacy accumulation story has never been better. While the industry has changed over time and other companies were fixated ONLY on guaranteed income, Legacy has kept a precision focus on innovating ways for retirees to earn. For consumers who seek higher returns, need to play retirement catch-up, or want to maximize the legacy they leave to loved ones with an enhanced death benefit, our entire FIA portfolio has been custom-designed to provide tremendous growth potential. The best way to appreciate the power and performance of our products is to run an illustration or call the Sales Team at 800-395-1053, Ext. 4002.

LibertyMark^sm 7, 10, 10 LT, SE 7, SE 10, SE 10 LT (Contract Series 411/4196/4205); LibertyMark^sm 7 Plus, SE 7 Plus (Contract Series 411/4191/4196/4205); LibertyMark^sm 10 Plus, 10 LT Plus, SE 10 Plus, SE 10 LT Plus (Contract Series 411/4179/4184/4196/4205). Products are single premium deferred fixed indexed annuities underwritten by Americo Financial Life and Annuity Insurance Company (Americo), Kansas City, MO, and may vary in accordance with state laws. Products are designed and exclusively marketed by Legacy Marketing Group^®. Some products and benefits may not be available in all states. Certain restrictions and variations apply. Consult contract and riders for all limitations and exclusions. Legacy Marketing Group^® and any licensed insurance agent/agency shown on this ad are independent, authorized agents/agencies of Americo. The Liberty Optimizer administrative fee of 1.00–1.75% (depending on the product version selected) will be deducted from the Accumulation Value at the end of each contract year, including the first.

The S&P 500 Index is a product of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates (“SPDJI”), and has been licensed for use by Americo Financial Life and Annuity Insurance Company (“Americo”). Standard & Poor’s^®, S&P 500^® and S&P^® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Americo. Americo’s Product is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.

Legacy and its representatives do not give legal or tax advice. Clients should consult a qualified financial adviser regarding taxation as it applies to them. Fixed indexed annuities may not be suitable for all.

1.	Emily Zulz, “1 in 3 Americans Have Less Than $5,000 in Retirement Savings” ThinkAdvisor (May 8, 2018).
2.	Returns applied to LibertyMarksm 10 policies issued two years prior to the date shown. Current participation rates may be higher or lower but are guaranteed never to be less than 5% (may vary by state). Keep in mind that past performance is no guarantee of future results. Any such example must not be regarded as guaranteed or as an estimate of future performance, unless it is based solely on the minimum guaranteed interest rates.
3.	Available upon death, surrender, or annuitization, less surrender charges. Rate for contracts issued in 2019.

LMG4177v0219 18-625-4 (02/19)   FOR AGENT USE ONLY. NOT FOR USE WITH CONSUMERS.