For years, the so-called 4% rule provided the baseline from which advisors launched strategies for retirement account withdrawals. The rule is simple, well-trusted, and relatively unlikely to fail—or at least it used to be. In today's low-interest rate environment, the strategies that worked for the past 20 years are simply not cutting it, meaning that advisors and clients must readjust their expectations to uncover alternative solutions for providing sustainable retirement income.

While the word "annuity" may be a dirty one for clients who have traditionally sought aggressive investment returns (or worried about their high costs), the evidence cannot be ignored: new studies suggest that annuities are a competitive alternative to the newly old-fashioned 4% rule. For those clients unwilling to modify their retirement income planning strategy so dramatically, many advisors have discovered a new method for determining retirement withdrawal rates, inspired by the system used by the IRS itself.

The Problem With 4%