In collaboration with Annexus, the researchers used S&P 500 Index dynamic participation rates to simulate FIA performance over the past 90 years. The data, which considered historical volatility, interest rates, and dividend rates, indicated that uncapped FIAs would have outperformed bonds on an annualized basis for the past 90 years.

In addition, it also found it "highly unlikely" that bond investors will reap as high a return from capital gains over the next decade as they have in the past 10 years. In fact, if rates rise, the paper finds, capital gains in the future will be negative (capital losses).

It adds that uncapped FIAs offer a more tailored risk profile than bonds, capturing a portion of the growth offered by large-cap stocks while lowering overall market risk.

In the report, Ibbotson says, "What financial advisors should acknowledge is the immense impact that shifting market conditions, longer life expectancies, and uncertainties surrounding the future of Social Security have made on our U.S. economy. In recent years, we recognized the potential of these conditions to result in a perfect storm where investors may be left with insufficient funds to carry them through retirement."

He continues, "Conventional wisdom has most investors derisking their portfolios by allocating more heavily to bonds as they approach retirement. However, investors should consider other alternatives such as FIAs. In this low-interest-rate environment, complacency can be a danger to our clients' futures."