Businesses entities including sole proprietorships, partnerships, limited liability companies and corporations whose employees are limited to the owner(s) and the owners’ spouse(s) are generally eligible to establish an Individual 401(k). An Individual 401(k) plan is funded by select AIG SunAmerica variable annuities.
The new 401(k), sold by financial professionals licensed to sell AIG SunAmerica Retirement Markets products, provides optional living benefits funded through an AIG SunAmerica variable annuity that enable income protection and guarantee features—regardless of market performance, according to a press release. MarketLock for Life Plus is offered as an optional feature for an additional fee in the variable annuity used to fund the AIG SunAmerica Individual 401(k).
Individual 401(k) enables business owners to create their own personal retirement plan with the growth potential of a traditional 401(k) plan during work years, and the tools to create an income stream during retirement similar to that of a defined benefit plan. According to the firm, when this personal retirement plan includes an optional variable annuity living benefit such as MarketLock For Life Plus, it helps self-employed business owners navigate around three of retirement’s biggest risks:
- Longevity Risk: MarketLock For Life Plus provides a way to help guard against longevity risk and to provide annual retirement income for as long as the business owner or business owner and spouse live—providing withdrawals are taken within the parameters of the feature.
- Market Risk: Market volatility at the wrong time may seriously affect retiree investments and retirement income. According to the firm, MarketLock For Life Plus protects against this risk with guarantees that retirement income will not suffer regardless of how the market performs.
Inflation Risk: Diversification alone does not always ensure a profit or protect against market loss.
- MarketLock For Life Plus can step up and lock in investment gains, providing the potential for higher retirement income streams to help keep up with the rising cost of living, according to the firm.