Client Solutions
Foundational Income
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Foundational Income

Starting at the beginning: Foundational income

Throughout your career, you have likely focused on the deferral stage. And hopefully you’ve become very

good at it.

As you shift your focus to providing retirement income, you may need a change in perspective. You will likely discover that all retirement income is not equally important. There is an important need to have a portion we call foundational income. What remains is a nice to have component that pays for discretionary expenses. These include paying for a loved one’s college tuition, travel or gifting to a favorite charity.

Foundational income must first be set aside to pay for those expenses that never go away. Most clients will need a reliable income source to pay for:

  • Food
  • Mortgage and insurance payments
  • Heat and other utilities
  • Gasoline and car maintenance
  • Prescriptions, medical expenses, etc.

Fortunately, these expenses may be somewhat predictable; unfortunately they must be paid every month, quarter or year. They are important, however, because they support your clients’ “base” standard of living. And every client will want to be confident these expenses will be taken care of during their retirement.

Solid retirement income strategies are built on a strong base of foundational income. Doing so allows the strategy to better withstand the stress placed on it throughout the retirement years ahead.

At American Financial we focus on creating foundational income through fixed index annuities and possibly the use of optional income riders.1  Together we will identify and address your clients’ unique needs for foundational income first. With our help, you can help your clients find a solution that:

  • Guarantees your clients an income they cannot outlive2
  • Hedges against the ill effects of inflation
  • Avoids losses in down markets3
  • Has interest potential correlated to up markets

Want to see the difference our foundational income approach makes in creating individualized retirement income case designs? We’d be happy to share our knowledge. Just give us a call.


1Income riders are generally optional and available at an additional cost. 
2Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

3Early withdrawals may result in loss of principal and credited interest due to surrender charges.


Fixed index annuities are designed to meet long-term needs for retirement income, they provide guarantees against the loss of principal and credited interest and offer the reassurance of a death benefit for your beneficiaries. Fixed index annuities may incur additional costs for optional riders.


Any distributions may be subject to ordinary income tax and, if taken prior to age 59 ½, an additional 10% federal tax.

Although an external index or indexes may affect contract values, the contract does not directly participate in any stock or equity investments. You are not buying shares of any stock or index.