Three variable annuity strategies top advisors are using — and why they work

Posted on: May 29, 2026

When MassMutual Strategic Distributors partnered with Greenwald Research to interview financial professionals actively selling variable annuities, one theme surfaced again and again: the best advisors aren't leading with product features. They're leading with the client's life situation — and matching the annuity to the moment.

That distinction matters. Because while guaranteed lifetime income remains the single most compelling feature advisors cite — "it's very good for planning purposes, it's very good for customer satisfaction, knowing there's a portion of the portfolio that they know they can budget on, they know it's always going to be there, they'll never outlive it," as one high-volume seller put it — the way that guarantee gets positioned depends entirely on the story the client is living through right now.

Here are three strategies top-performing advisors shared with us — real approaches they're using in real client conversations — and a high-level look at the thinking behind each one.

Editor's note: The quotes and perspectives included throughout this article are drawn from in-depth interviews with financial advisors conducted on behalf of MassMutual Strategic Distributors.

1. An annuity for transforming underperforming assets into income power

Every advisor has seen it: a client sitting on an annuity contract that hasn't done much of anything for years. The money isn't lost, but it certainly isn't working. The client feels stuck — switching feels complicated, and staying put feels like accepting mediocrity.

Top advisors told us they see this scenario as one of their biggest opportunities to create genuine value. One advisor described working with a client who had put $450,000 into a contract that had grown to just $500,000 over seven years — barely keeping pace. After conducting a suitability review and weighing the pro’s and con’s with the client, they recommended a 1035 exchange into a new variable annuity with stronger features and better growth potential, the client's account was up more than 30 percent. "That was a really good experience and she's really happy," the advisor noted.

The strategy behind it: A 1035 exchange allows a client to move from one annuity contract to another without triggering a taxable event. For clients sitting in older contracts with limited growth, lackluster riders, or outdated benefit structures, this can be a powerful way to unlock better income potential, improved benefit base growth, and stronger downside protection — without starting over. As one advisor emphasized, the guarantee on newer contracts "increases every single year off the benefit base. You can get 7-8-9% per year growth off that piece. Sometimes they even give you the bonus when you roll it into a new annuity."

The takeaway for advisors is straightforward: if you have clients with older annuity contracts that aren't performing, a 1035 exchange conversation isn't just an opportunity — it's a responsibility. Those underperforming assets can be transformed into a vehicle that genuinely powers their retirement income.

Note: A 1035 exchange may not be suitable for all clients. Careful analysis of the existing contract, including surrender charges, benefits, and features, should be conducted before recommending an exchange. While a 1035 exchange does not trigger a taxable event, clients should understand that moving to a new annuity contract will subject them to a new surrender charge schedule and may result in an increase in fees and expenses relative to their existing contract. Always ensure the new contract offers meaningful improvements aligned with clients’ specific needs and circumstances.

Have questions about whether a 1035 exchange or other annuity strategies might be right for your clients? Talk to our experts about personalized guidance for your practice. Call us at 855-464-3436.

2. An annuity for confident income when your job stress — and paycheck — drops

Not every client walks in with a neat retirement date circled on the calendar. Some are dealing with something messier: a career that's grinding them down, a body that's telling them to slow down, or a realization that the job they've been doing for decades isn't sustainable for another five or ten years.

This scenario came up repeatedly in our research. One advisor described a client whose spouse "is getting burnt out, needs to step down. They're really worried about what happens if her income goes down." The advisor walked them through a strategy of taking her 401(k) and positioning a portion in an annuity - "just showing the guaranteed income adding to their security in retirement." The conversation wasn't about retirement planning in the traditional sense. It was about giving a family confidence that stepping back from a punishing work situation wouldn't mean stepping off a financial cliff.

The strategy behind it: For clients who are approaching a voluntary or involuntary reduction in earned income — whether from burnout, health concerns, downsizing, or a planned transition to part-time work — a variable annuity with a guaranteed lifetime withdrawal benefit can serve as an income bridge. By allocating a portion of accumulated savings into an annuity before the income reduction happens, the client locks in a predictable income stream that supplements their lower paycheck and provides a floor they can budget around.

This is particularly relevant for clients in their 50s and early 60s who aren't quite ready for full retirement but recognize their current earning trajectory isn't sustainable. The beauty of positioning a VA here is that it reframes the conversation: it's not about "giving up" income. It's about building a guaranteed income layer that gives the client permission to make the life change they need to make.

Ready to structure this conversation for your client needs? Explore how MassMutual’s variable annuity solutions can help your clients build guaranteed income streams.

3. An annuity for turning a portion of your 401(k) into a personal pension

The pension is largely a thing of the past for most private-sector workers — but the desire for pension-like income has never been stronger. Advisors told us that clients who are approaching retirement and staring at a 401(k) balance often have the same question: How do I turn this lump sum into something I can live on, reliably, for the rest of my life?

Our research confirmed this is one of the most natural and effective entry points for variable annuity conversations. As one advisor explained, clients on "the cusp of retirement… see that they are about to go from the accumulation phase to the distribution phase, and they don't know how they are going to live the lifestyle, because they are not going to have paychecks anymore." These clients aren't looking for more market exposure. They're looking for certainty.

The advisor approach here is elegant in its simplicity: roll over a portion of the client's 401(k) into a variable annuity with a guaranteed lifetime income rider, effectively creating a personal pension — a predictable income stream that can't be outlived, regardless of what the market does. A variable annuity is well-suited for clients who value both a guaranteed income floor and continued market participation within their contract. For clients whose primary objective is guaranteed lifetime income and who do not require market exposure, a fixed or income annuity may also be worth exploring as an alternative. Advisors should carefully evaluate each client’s risk tolerance, need for flexibility, and overall financial picture when determining which product best meets their needs.

The strategy behind it: The 401(k)-to-annuity rollover works particularly well for the "pension builder" client profile — individuals aged 50 to 70, with $250,000 to $2 million in assets, who are either nearing or in early retirement.* By dedicating a portion (not all) of their 401(k) to a VA with guaranteed lifetime income, these clients get the psychological and financial benefit of a defined income floor while maintaining flexibility and market participation with the remainder of their portfolio.

* This client profile — including the representative age range and asset level — reflects common characteristics observed in in-depth conversations with financial advisors conducted on behalf of MassMutual Strategic Distributors. Individual client circumstances will vary.

The key phrase advisors emphasized is "a portion." This isn't about moving everything into an annuity. It's about carving out enough to create a reliable income layer — one that covers essential expenses — so the rest of the portfolio can stay invested for growth. It turns the distribution-phase anxiety into a structured, budgetable plan. And as one advisor pointed out, the income "doesn't stop" even if the market drops — "and that's the important point."

Want to demonstrate success to your clients? Explore this case study showing how patience and timing — deferring withdrawals and reaching higher age bands — can play a meaningful role in increasing future retirement income.

The common thread: advisors learning from advisors

These three strategies didn't come from a product development team or a marketing playbook. They came directly from financial professionals who are having these conversations every day — advisors who understand that the most effective way to position a variable annuity is to start with the client's life, not the product's features.

The best wholesaler conversations, advisors told us, work the same way: "The best wholesalers are the ones that come in with examples of who's used that particular product… and given a real case study discussion… not just, 'Here are some numbers on a white board,' but a sales idea."

That's exactly the spirit behind this series. We're sharing what's working in the field — from the financial professionals who are making it work — so you can take these ideas, adapt them for your practice, and start conversations that lead to better outcomes for your clients.

• See how MassMutual’s variable annuity and income guarantee riders can help meet your client needs.
• Explore more retirement strategies and sales ideas.
• Talk to our experts about variable annuity strategies at 855-464-3436 or find your wholesaler.