AllianceBernstein

Lifetime Income Strategy

Common Sense

in a Complicated World

Life. Career. Ambition.
Each person is unique,
so why should retirement
be any different?

Everyone needs to plan for the specific future they want, but the options for securing the income needed to support a long, happy retirement may be out of reach for some—or introduce unintended consequences that could stand in the way of better outcomes.

There’s a practical solution:

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Putting Confidence Back into Retirement

For over a decade, AB has partnered with large defined contribution (DC) plans to deliver default solutions that give participants all the benefits of target-date funds—with the opportunity to access guaranteed income for life.

Income is a critical link to retirement security, and our surveys show that participants need help. Some, worried about uncertain markets, don’t spend enough of their savings to fully enjoy their retirement. Others may not save enough, or if they spend too much too soon, they risk running out of money.

That’s where AB’s Lifetime Income Strategy comes in. It’s a flexible, cost-effective, personalized solution that helps alleviate worries about retirement security. It’s a program where participants can build a sustainable, secure lifetime income stream—and see the progress as they do.

The Formula for a Secure Future

Insured Income

A multiple-insurer approach provides competitive rates and secure income—even in market downturns.

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Flexible Access

Receive full, penalty-free access to assets and the ability to pass remaining balances to beneficiaries at death.

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Growth Potential

Continuous, significant exposure to capital markets provides the opportunity to grow assets, even in retirement.

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A Comprehensive Solution:

AB’s Lifetime Income Strategy

An integrated solution that combines the benefits of target-date funds with the opportunity to secure guaranteed income for life. And plan sponsors can customize it to meet participants’ diverse needs.

The Formula for a Secure Future

Insured Income

A multiple-insurer approach provides competitive rates and secure income—even in market downturns.

+

Flexible Access

Receive full, penalty-free access to assets and the ability to pass remaining balances to beneficiaries at death.

+
12E5E4B5-B911-45C8-BC54-870311198C06

Growth Potential

Continuous, significant exposure to capital markets provides the opportunity to grow assets, even in retirement.

=
A Comprehensive Solution:

AB’s Lifetime Income Strategy

An integrated solution that combines the benefits of target-date funds with the opportunity to secure guaranteed income for life. And plan sponsors can customize it to meet participants’ diverse needs.

It’s a common-sense
in-plan default solution

So what’s stopping you?

So what’s stopping you?

So what’s stopping you?

It's a Complex World—Addressing the Challenges

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Income Awareness

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Challenge

Almost half the participants we've surveyed believe that they can withdraw 7% or more of their assets annually in retirement—a level that would likely cause them to run out of money. A realistic withdrawal amount would probably be near 2%. With a guaranteed income solution, it could be much higher.

Solution

Insurance incorporated into a DC plan gives participants confidence and clarity, as they know exactly what their guaranteed income will be at retirement. This security could help them boost sustainable withdrawal rates on average by 70% or more.

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Longevity and Mortality

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Challenge

Most income insurance solutions eliminate longevity risk—the risk that participants run out of money in retirement. But some have dangerous side effects: the risk of dying early (mortality risk) and leaving beneficiaries with nothing.

Solution

AB's Lifetime Income Strategy solves longevity and mortality risk by insuring the income stream throughout retirement and allowing participants to pass on any remaining assets to beneficiaries after death.

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Growth and Liquidity

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Challenge

Our research shows that 67% of participants would rather accept a smaller income payment in retirement ($40,000 per year) and keep access to their money and growth potential than receive a higher income payment of $50,000 with no access to their savings.

Solution

AB's Lifetime Income Strategy not only offers participants full access to their savings, but also preserves income in down markets. Participants also benefit from market upturns, even in retirement.

income awareness image

Income Awareness

Read more
income awareness image

Income Awareness

Challenge

Almost half the participants we’ve surveyed believe that they can withdraw 7% or more of their assets annually in retirement—a level that would likely cause them to run out of money. A realistic withdrawal amount would probably be near 2%. With a guaranteed income solution, it could be much higher.

Solution

Insurance incorporated into a DC plan gives participants confidence and clarity, as they know exactly what their guaranteed income will be at retirement. This security could help them boost sustainable withdrawal rates on average by 70% or more.

Close
longevity and mortality image

Longevity and Mortality

Read more
longevity and mortality image

Longevity and Mortality

Challenge

Income insurances eliminates longevity risk:the risk that participants run out of money in retirement. But there's a side effect—the risk of dying early (mortality risk) and leaving beneficiaries with nothing.

Solution

AB’s Lifetime Income Strategy solves longevity and mortality risk by insuring the income stream throughout retirement and allowing participants to pass on any remaining assets to beneficiaries after death.

Close
growth and liquidity image

Growth and Liquidity

Read more
growth and liquidity image

Growth and Liquidity

Challenge

Our research shows that 67% of participants would rather accept a smaller income payment in retirement ($40,000 per year) and keep access to their money and growth potential than receive a higher income payment of $50,000 with no access to their savings.

Solution

AB’s Lifetime Income Strategy not only offers participants full access to their savings, but also preserves income in down markets. Participants also benefit from market upturns, even in retirement.

Close

The Cost of Doing Nothing

Providing a comprehensive solution isn’t only good for participants, it’s also good for business.

Did you know?

Research shows that stressed employees worrying about their retirement future are less productive, less engaged and may even put off retirement. Just a one-year delay could cost an employer an extra $50,000 annually.

Good for You and Your Employees

AB’s Lifetime Income Strategy provides participants with the financial confidence to retire, improves productivity, and helps retain and attract talent—all of which bolster a company’s bottom line.

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Leveling the Retirement Income Playing Field

A Comprehensive Framework for Evaluating Diverse Lifetime Income Solutions

Our latest research provides a framework to help defined contribution plan sponsors and consultants evaluate and select an income solution that meets participants’ individual needs.

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Competitive Bidding Process

Insurers bid quarterly for new contributions
AB tracks participant benefits and rates by insurer in a proprietary system, passing relevant data to the plan’s recordkeeper

Multiple-Insurer Design—Why More Is Better

With up to five insurers competing to guarantee income, our multi-insurer approach provides better and more competitive rates to the participant. AB also takes on the fiduciary oversight for selecting and monitoring the insurers.

Flexible and Straightforward Implementation

AB’s Lifetime Income Strategy is a fully integrated solution that can be used as a default option to help drive participant usage. Our team has been partnering with plan sponsors for over a decade, helping to engage with participants and making implementation as easy as possible.

A Streamlined Process

AB’s servicing team helps plan sponsors define their goals
Asset allocation is designed to meet plan sponsor and participant needs
Implementation includes full support to onboard plan
Active communication with participants aids engagement
Ongoing partnership supports enhancements

Explore the Lifetime Income Video Series

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from Our Experts

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Learn More About AB’s Lifetime Income Strategy

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