Registered index-linked annuities can play a number of different useful roles in a client's retirement portfolio.
Clients can use RILAs as part of a strategy to further diversify their portfolio.
RILAs might also be suitable for a client who is seeking protection from some loss in exchange for capturing more upside market performance than might be possible with some other financial products.
However, not all RILAs are the same, and different RILAs may help clients achieve different goals. Some RILAs are designed to help meet wealth accumulation needs for retirement, while others are intended to provide sustainable retirement income strategies.
Let's look at these two types of RILAs and which clients might benefit from them.
Please note that this article is for general informational purposes only and should not be construed as legal, tax, accounting, investment, or fiduciary advice. Clients should confer with their tax, legal, and accounting professionals in addition to consulting with a financial professional.
When Clients Focus on Accumulation
Certain types of RILAs are designed for clients who may be earlier in their retirement time horizon and still looking to grow their retirement assets.
Such RILAs may benefit clients who are seeking some protection for a portion of their assets but don't currently need a rider that offers a source of guaranteed lifetime income.
This type of client could be someone who, for example, is 50 years old and 10 to 15 years from retirement. Given their financial goals, this client may want the opportunity to grow their portfolio in up markets while adding a level of protection from future market volatility.
As long-term investments, RILAs can help clients capture market growth opportunities that could occur over an extended period, which may further assist clients with meeting their retirement asset growth objectives.
Adding a RILA to a client's portfolio during the accumulation phase of retirement planning could help them reach such goals.
When Clients Seek Lifetime Retirement Income
With the retirement landscape continuing to change, many clients are interested in products that can help provide additional sources of lifetime income. Increases in longevity and decreased availability of pensions are among some of the factors driving interest in such products.
According to a nationwide survey conducted in May 2023 by Morning Consult for the American Council of Life Insurers, 54% of 1,003 pre-retirees ages 45 to 65 reported that the current economic environment has them considering "a guaranteed lifetime income product that pays out like a pension." The survey also found that respondents earning both below and above $100,000 per year expressed interest in guaranteed lifetime income products nearly equally.
Myles J. Lambert is executive vice president and chief distribution and marketing officer at 
