Annuities: A Bridge to Retirement


Annuities: A Bridge to Retirement

Delaying Social Security benefits to age 70 can make sense for many Americans. It is often said that the break-even age for such a strategy usually falls shortly after an individual turns 80. For couples, deferring benefits can make even more sense considering that the surviving spouse is allowed to earn the higher benefit between the two. While there are some concerns about the solvency of the Social Security system, few believe that current recipients and those very close to retirement age will see their benefits slashed. Moreover, for each year someone puts off electing to begin Social Security income, they effectively increase their future benefit by 8%. Consequently, it has become conventional guidance to delay benefits as long as possible.


A Desire to Delay

The Center for Retirement Research (CRR) revealed that about one-third of 401(k) plan participants would indeed delay claiming Social Security benefits as long as they could use their active 401(k) as a near-term vehicle for income. Annuities are thought to be a potential solution for individuals close to retirement.


Early Retirement – Not Always by Choice

There is a problem with deferring benefits to age 70, though. Most people retire at age 62, even though they expect to retire at age 65. While some workers can afford early retirement, many people are forced out of work due to health problems or disability. Company downsizing and layoffs are also commonly cited reasons, according to the 2021 Retirement Confidence Survey published by the Employee Benefit Research Institute.


Annuities as a Solution

This has opened a retirement gap—people often need income between their early 60s and age 70. Annuities can be used as a bridge to a secure retirement. Halo Investing gives advisors access to a competitive marketplace of protective investments—including annuities—with transparent costs. Our suite of structured notes, as well as defined-outcome and buffered exchange-traded funds (ETFs), can be used as portfolio tools to generate income with defined downside risk. Investors approaching and in retirement often require adequate income and some growth from their nest egg, making them very conscious of volatility.


Waiting On a Rules Change

The study performed by the CRR might nudge regulators to allow income-producing vehicles such as annuities to be included in 401(k) plans. But until that adoption takes place, individuals and couples are left seeking alternatives with their existing assets and income outside of a 401(k) plan.



Now could be the ideal period to consider allocating to annuities to complement assets held in an employer-sponsored account. A recent rise in interest rates and inflation fears underscore the uncertainty in traditional investments like stock and bond funds. The typical 60/40 portfolio has seen significant losses of late. The steady total returns of such investments, as seen during the 2010s, could be a relic of the past. The next decade might feature continued volatility and weaker returns from typical equity and fixed-income assets.


About Halo

Halo Investing is an award-winning technology platform for protective investment solutions. Headquartered in Chicago, with offices in Abu Dhabi, Zurich, Dubai, and Singapore, Halo was co-founded by Biju Kulathakal and Jason Barsema in 2015 with a mission that focuses on putting “impact before profits,” providing access to impactful investment opportunities previously unavailable to most investors. Through the Halo platform, financial advisors and investors can easily access structured notes, market-linked CDs, buffered ETFs, and annuities, as well as a suite of tools to educate, analyze, customize, execute, and manage the most suitable protective investment product for their portfolios. Halo has received a growing number of honors and was recently named one of Fast Company’s Ten Most Innovative Companies of 2021. For more information, please visit:

Halo Investing is not a broker/dealer. Securities offered through Halo Securities LLC, a SEC registered broker/dealer and member of FINRA/SIPC. Halo Securities LLC is affiliated with Halo Investing Insurance Services and Halo Investing. Halo Securities LLC acts solely as distributor/selling agent and is not the issuer or guarantor of any structured note products.