The 401k Fixed Indexed Annuity?
Almost daily, I am asked how to offer an FIA (indexed annuity) to someone who has an active 401k. Usually, my answer is to see if that company’s 401k offers in-service distributions. I tell the advisor that he needs to talk to the company’s 401k TPA or Third Party Administrator. These days about half the 401ks offer some sort of in-service distributions. The issue becomes what can we do as advisors if a client is not able to move their money out of a 401k. Usually, this means they are stuck and do not have access to products backed by insurance companies like FIAs with income riders. It looks like this marketplace could be changing soon as LSW (Life Insurance Company of the SouthWest) has unveiled their SecurePlusVIP product which includes a guaranteed income rider and can be sold inside of 401ks. We will keep you abreast of details as they come about. Please feel free to reach out to the Annuity Think Tank team for details