A Fixed Annuity is an annuity type that earns a specific rate of return each year. In RightCapital, advisors can propose fixed annuity purchases in the Retirement > Analysis section. Annuity values and income can be tracked within the Retirement > Cash Flows.
If you would like to propose the purchase of a fixed annuity within a client's Proposed Plan, this can be done within the Retirement > Analysis section. Scroll down to the Action Items at the bottom of the page, click Edit > Add New Items, and then choose Annuity:
This will add a new annuity purchase to the proposal. This entry allows you to enter the purchase year, the value of the new annuity, and specify which account is being used to fund it:
An optional account value bonus can be entered, which is an upfront bonus that will be applied to the transferred account value for the annuity. Be sure to select 'Fixed Annuity' as the Annuity type, which will allow you to enter the Crediting rate. The future value of the fixed annuity will increase based on the crediting rate.
The eventual distributions from the proposed fixed annuity will be determined by the option you select in the Distributions dropdown box:
- Regular withdrawals will treat the annuity similarly to other investments. Income distribution cards can be added in the Profile > Income section to withdraw a specific amount each year from the annuity.
- Annuitization will surrender the account value in exchange for a guaranteed fixed income stream. This option will populate new fields to enter the details of the annuitization.
- Lifetime income can be used for an annuity that has a guaranteed lifetime income rider or associated benefit. This option will populate new fields to enter the details of the lifetime income guarantee.
After proposing a new fixed annuity in the Retirement > Analysis section, you can track the value of the annuity as well as the income stream within the Retirement > Cash Flows tab.
The value of the Annuity can be tracked within the Cash Flows > Accounts tab, by viewing the Ending Balance by Accounts:
The income stream from the annuity can be tracked within the Cash Flows > Summary tab, by clicking into the underlined header for Income Inflows:
