Propose an Annuity Purchase - RightCapital Help Center

RightCapital is designed to elevate your advising practice to be head and shoulders above the crowd. One feature built into every subscription of RightCapital is the ability to model how annuity purchases can impact a client's retirement income needs. Advisors are free to propose multiple annuity purchases at any time within each financial plan. This is often a powerful tool for clients who may be getting close to retirement age.

To model a proposed annuity purchase, navigate to the Retirement > Analysis area. Then use the Action items to illustrate the impact of moving assets from existing accounts into different types of annuities. Use the steps below to model these scenarios:

In the Retirement > Analysis module, scroll down to the Action Items at the bottom of the page, and select "Edit" in the lower right:

Within this drawer, click the Add New Items button in the lower left, and then select the "Annuity" option. This will add a new annuity purchase to the proposal:

Fill out the details of the annuity purchase. Enter the purchase year, the value of the new annuity, and specify which account is being used to fund it. The account type chosen to fund the purchase will determine whether the annuity is qualified, non-qualified, or Roth:

Select an Annuity type. The data entry fields within the proposed annuity entry will change depending on your chosen annuity type. For more details, please use the hyperlinks below:

Use the Distributions drop-down box to illustrate how money will be withdrawn from the annuity. For more details, please use the hyperlinks below:

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.

Once the data entry for the proposed annuity purchase has been completed, click Save in the lower right. Your annuity purchase will be saved as an action item, and will be included in all proposed plans.

Use the action item toggle to adjust whether the annuity purchase is included or excluded within each proposal. You can also click the action item name to make changes to the proposed annuity's information:

You can repeat the steps listed above as needed to include multiple annuity proposals within the financial plan, and analyze the impact on the client's retirement projections.

Pro Tip: 1035 Exchange

You can demonstrate an annuity 1035 exchange by selecting an existing annuity as the funding source of the new annuity you are proposing:

For more details on modeling existing annuities as assets in the Profile > Net Worth tab, click here.

After adding one or more annuity purchases to a proposal, the Monte Carlo and Cash Flow projections will be updated for any proposed plans that include the annuity. Annuity income can be tracked in the Cash Flows > Summary tab, within the Income Inflows column:

The value of the annuity over time can be tracked within the Cash Flows > Accounts tab, by viewing 'Ending Balance by Accounts':

Pro-Tip: Annuity Models

If you find yourself entering or proposing the same annuity products repeatedly across multiple clients, utilizing Annuity Models will save you a significant amount of time while building client plans in RightCapital.

For more information, click here.