Volatility can stress even a well-planned retirement strategy. A registered index-linked annuity (RILA), may help alleviate some of this stress. Talk to clients about how this strategy offers potential for growth linked to an index with a level of protection from market losses.

Your client has saved carefully and is ready to retire. On the docket is some exciting travel, more time with grandchildren, and the ability to engage more fully in a long-loved avocation.

Then, the market takes a downturn and everything is disrupted. Your client now faces a relatively common challenge—making last-minute adjustments to maintain a comfortable withdrawal rate with less spending or finding a way to delay retirement until the market is better. Either way, this was not the retirement planned.

Mitigating Volatility with a Registered Index-Linked Annuity

Planning ahead can offer your client a way to continue to pursue growth and have some protection from market volatility. A RILA may help accomplish this by using a buffer or a floor to protect against a level of loss without the client investing directly in the market. If the RILA is in place before the market corrects, the client may have more confidence to stay invested. This may be beneficial, especially in the crucial years just before and after retirement.

Here is how each protection option works:

• Buffer: A buffer absorbs a set level of loss. If the buffer is set at 10% and the index loses 20%, the contract owner would experience a 10% drop in value. If the index loses 30%, the contract owner would experience a 20% loss. If the negative return is within the buffer, the contract owner would not incur a loss.
• Floor: A floor limits a loss to a stated percentage, for example, 10%. With a floor, the contract owner would not lose more than 10% even if the negative return of the index was greater than 10%. If the index loses 30%, the contract owner would experience only a 10% loss. If the index loses less than the 10% floor percentage, the contract owner will incur that loss.

A RILA with a buffer may offer more growth potential than a RILA with a floor due to generally higher crediting rates, but also comes with a risk of substantially more loss than the floor.

A RILA Calculator Helps in Presenting Options to Clients

Given the complexities, the use of a RILA calculator can help clients visualize how the interest-crediting and protection options might work. A RILA calculator typically allows financial professionals as well as their clients to create different scenarios by choosing crediting strategies, indexes, and protection features. For example: 

• A cap rate crediting strategy with a 6-year term
• The S&P 500^® index
• A buffer option at 20%

The calculator illustrates how this strategy might perform in a variety of market conditions. Some calculators allow up to five strategies as well as comparisons of different options. 

The hypothetical example below compares a Performance Mix crediting strategy¹ —one that few use currently—against a Dual Direction crediting strategy, each starting with a $100,000 investment.

Source: Pacific Life’s online RILA calculator. The graph shows how an investment in the strategies would have performed in a variety of market conditions. The bars represent values calculated based on daily rolling 6-year periods since May 22, 2000 for the worst, average, best, and most recent 6-year rolling periods. The most recent 6-year period ended on 8/31/25. This chart illustrates values based on historical index performance and the rates shown. Rates are subject to change at any time by Pacific Life. The values shown are not guaranteed; actual results may be higher or lower.

This information helps clients to both determine the level of risk that is acceptable and which strategies might help meet their needs.

Back to the Client Who’s Ready to Retire

Imagine that six years prior to retirement, you and your client selected a RILA strategy that would allow continued pursuit of growth, while also offering protection from a level of market downturn. The client accepts that growth may be limited but now knows that the hoped-for retirement date might not be in jeopardy thanks to the level of protection the RILA offers against market volatility.

Sure enough, five months before your client retires, the market drops 30%. The RILA performs as it’s designed to, limiting the loss. Your client retires on time—and on track!

Volatility Around Retirement Age Is Never What Clients Want. A RILA Can Help.

Limiting risk in the years before and after retirement may both improve portfolio sustainability and increase client confidence in the retirement plan. A RILA can offer a client who is more sensitive to market events the ability to pursue growth while retaining a level of protection.

ACTIONS YOU CAN TAKE RIGHT NOW

• Identify clients who plan to retire in five years or who retired within the last five years.
  

• Evaluate whether or not their portfolios might benefit from pursuing growth while limiting risk.
  
  
• Determine whether or not a RILA might keep retirement plans on track
  

Additional Resources and Links

RILAs:  An Evolved Approach to Help Prepare for Retirement

Pacific Protective Growth Calculator

¹ The Performance Mix crediting strategy calculates the weighted average of returns from three indexes: the S&P 500^® index, the iShares^® Russell 2000 EFT and the MSCI EAFE^® Index. Interest is determined according to the following weights: 50% for the highest-performing index, 30% for the second-highest-performing index, and 20% for the third-highest-performing index. The weighted average is used with a participation rate (a percentage that determines how much of the index return is credited) to determine the interest that will be applied.

For more information about retirement-planning, please contact our Retirement Strategies Group at RSG@PacificLife.com or (800) 722-2333, ext. 3939. PacificLife.com

Indexes are unmanaged and not available for direct investment. For interest-crediting calculations, the index performance does not include the reinvestment of dividends. Not all indexes, protection options, and terms are available with every crediting strategy. When you allocate to an index that is linked to the performance of an exchange-traded fund (ETF), you are not investing in the ETF. Index-based ETFs seek to track the investment results of a specific market index. Due to a variety offactors, including the fees and expenses associated with an ETF, the performance of an ETF may not fully replicate or may, in certain circumstances, diverge significantly from the performance of the underlying indexes.

The S&P 500^® index is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and has been licensed for use by Pacific Life Insurance Company. S&P^®, S&P500^®, US 500, The 500, iBoxx^®, iTraxx^®, and CDX^® are trademarks of S&P Global, Inc., or its affiliates (“S&P”). Pacific Life’s product is not sponsored, endorsed, sold, or promoted by S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500^® index.

The Product and its MSCI EAFE Index-Linked Options referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such Products or any index on which such Products are based. The Policy Contract contains a more detailed description of the limited relationship MSCI has with Pacific Life Insurance Company and any related products.

Invesco Capital Management LLC (“ICM”) serves as sponsor of QQQ (the “Invesco ETF”) and Invesco Distributors, Inc. (“IDI”), an affiliate of ICM serves as distributor for the Invesco ETF. The mark “Invesco” is the property of Invesco Holding Company Limited and is used under license. That trademark and the ability to offer a product based on the Invesco ETF(s) have been licensed for certain purposes by Pacific Life Insurance Company, and Pacific Life & Annuity Company (collectively, “Pacific Life”).Products offered by Pacific Life are not sponsored, endorsed, sold, or promoted by ICM or Invesco Holding Company Limited, and purchasers of such products do not acquire any interest in the Invesco ETF(s) nor enter into any relationship with ICM or its affiliates. ICM makes no representations or warranties, express or implied, to the owners of any products offered by Pacific Life. ICM has no obligation or liability for any errors, omissions, interruptions, or use of the Invesco ETF(s) or any data related thereto, or with the operation, marketing, trading, or sale of any products or services offered by Pacific Life. Nasdaq^®, Nasdaq-100 Index^®, Nasdaq-100^®, NDX^®, QQQ^®, are trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Invesco Distributors Inc.. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued,endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

The iShares Russell 2000 ETF is distributed by BlackRock Investments, LLC. iShares^® and BlackRock^®, and the corresponding logos, are registered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”) and are used under license. BlackRock has licensed certain trademarks and trade names of BlackRock to Pacific Life Insurance Company for certain purposes. Pacific Life Insurance Company’s products and services are not sponsored, endorsed, sold, or promoted by BlackRock, and purchasers of such products do not acquire any interest in the iShares Russell 2000 ETF nor enter into any relationship of any kind with BlackRock. BlackRock makes no representations or warranties, express or implied, to the owners of any products offered by Pacific Life Insurance Company or any member of the public regarding the advisability of purchasing any product or service offered by Pacific Life Insurance Company. BlackRock has no obligation or liability for any errors, omissions, interruptions or use of the iShares Russell 2000 ETF or any data related thereto, or in connection with the operation, marketing, trading or sale of any Pacific Life Insurance Company product or service offered by Pacific Life Insurance Company.

This material is provided for informational purposes only and should not be construed as investment, tax, or legal advice. Information is based on current laws, which are subject to change at any time. Clients should consult with their accounting or tax professionals for guidance regarding their specific financial situations.

Pacific Protective Growth Contract Form Series: 10-1900

Rider Series: 20-1132, 20-1409, 20-1901, 20-1905

State variations to contract form series and rider series may apply

This material is intended for financial professional use only.