RetireOne Partners With Michelle Richter-Gordon on New Research that Evaluates the Value of Wrapping Risk in Client Portfolios with a CDA

Study analyzes how CDAs fit the RIA business model and the potential economic benefit of complementing a safe withdrawal strategy with portfolio income insurance

RetireOne^® today released a new study from Michelle Richter-Gordon, AIF^®: “The Net Economic Benefit of Wrapping Risk with a Contingent Deferred Annuity.” The new research examines the role a Contingent Deferred Annuity (“CDA”) may play in client retirement income plans and strategies. In her analysis, Richter-Gordon employs Monte Carlo simulations to compare how a CDA-protected portfolio utilizing a safe withdrawal strategy may fare when compared with an unprotected portfolio leveraging the same withdrawal strategy.

CDAs unbundle insurance protections from underlying investments enabling Registered Investment Advisors (RIAs) to wrap models or approved mutual fund and ETF investments held in client brokerage accounts, IRAs, or Roth IRAs with lifetime income protection. Designed to help investors combat longevity risk and sequence of returns risk, CDAs provide advisors with a solution to maintain oversight on client assets as they enter retirement and begin the decumulation phase.

“Investors who choose to add a CDA to their portfolio may enjoy a more stable and better retirement than do their uninsured counterparts,” writes Richter-Gordon, who also serves as Executive Director of the Institutional Retirement Income Council. “Inclusion of CDA enables more scenarios in which spending need not decrease. Most modeled scenarios enable income increases, and even if contract holders never use the guarantee, in most markets they may fare better (in terms of net economic benefit) with the higher equity allocation a CDA may enable.”

As markets continue to experience volatility, and interest rates are rising to stave off inflation, protecting client spending in retirement is a major concern. This is especially true for those clients in the “fragile decade” of their lives—the last five working years through the first five years in retirement—when a poor sequence of returns can negatively impact spending for their whole retirement.

"Investors suffered through a down market in equities and one of the worst bond markets in history last year compounded by a 6% increase in spending for consumer staples and services” said David Stone, Co-Founder and CEO at RetireOne. "Michelle’s research demonstrates how, even in challenging markets, wrapping a client portfolio with a CDA supports more stable retirement spending by allowing RIAs to increase client risk budgets."

In partnership with Midland National^® Life Insurance Company (Midland National) in 2021, RetireOne launched a Contingent Deferred Annuity called Constance^®. Constance offers a flat certificate fee and the flexibility to begin taking income at any time, allocate to 75% equities, and sever at any time. RetireOne and Midland National recently enhanced Constance with the goal of making the CDA easier to integrate into advisory practices and more straightforward to communicate with clients by instituting fee reductions, adding investment options and simplifying coverage choices.

"The Net Economic Benefit of Wrapping Risk with a Contingent Deferred Annuity” is a free download on RetireOne’s website. Advisors who would like to learn more about Constance can schedule a meeting or call their RetireOne Relationship Manager at (877) 575-2742. For additional information, please visit retireone.com.

About RetireOne

Serving over 1,100 RIAs and fee-based advisors since 2011, RetireOne^® is the leading, independent platform for fee-based insurance solutions. With offerings from multiple “A” rated companies, RIAs may access this fiduciary marketplace at no additional cost to them or their clients. Currently servicing over $1.4 billion of retirement savings and income investments, RetireOne continues to grow in its mission to provide advisors and their clients’ valuable retirement solutions that are simple to use, easy to understand, and delivered with outstanding service. Learn more at RetireOne.com and follow us on LinkedIn and Twitter @RetireOne.

The Certificate is designed to protect investors who are concerned that, either because of withdrawals over time, poor market performance, or both, their Covered Asset Pool may be depleted during their lifetime. To address that need, the Certificate in effect provides a limited form of insurance against outliving assets. The Certificate has no cash value, surrender value or death benefit. The Certificate is intended for long-term investment purposes. You and your client should consider the risks and expenses of the annuity carefully before investing. The prospectus contains this and other information. You or your client can call 877-575-2742 to obtain a current prospectus for the contingent deferred annuity. Inform investors to read it carefully before investing.

Securities offered through EF Legacy Securities, LLC (EFLS). EFLS is a member of FINRA/SIPC, registered in all 50 states and is a licensed insurance agency (resident KY license no. DOI-896601). In CA, EFLS is doing business as EF Legacy Insurance Agency LLC (nonresident license no. 0L01472).

The Constance℠ Group Contingent Deferred Annuity is issued by Midland National^® Life Insurance Company, West Des Moines, Iowa 50266, offered by EF Legacy Securities, LLC (dba RetireOne), member FINRA and underwritten by Sammons Financial Network^®, LLC., member FINRA. Sammons Financial Network^®, LLC., and Midland National^® Life Insurance Company are wholly owned subsidiaries of Sammons^® Financial Group, Inc. and are not affiliated with EF Legacy Securities, LLC., and RetireOne.

The Constance℠ Group Contingent Deferred Annuity can play an important role in your retirement plan but may not be for everyone. Before investing, you and your financial advisor should discuss aspects that affect the appropriateness of your situation, including cost, investment timeframe and other retirement assets you may have. The Certificate is intended for long-term investment purposes. Excess withdrawals may significantly decrease and even terminate the benefits provided by the Certificate.

NOT FDIC/NCUA INSURED, MAY LOSE VALUE INCLUDING LOSS OF PRINCIPAL, NO BANK/CU GUARANTEE, NOT A DEPOSIT, NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY.

FOR INSTITUTIONAL USE ONLY. NOT INTENDED FOR CONSUMER SOLICITATION PURPOSES.

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