Retirement Lifestyle Solution

Transcription

1 ADVISOR SALES GUIDE AND TOOLKIT Retirement Lifestyle Solution INVESTED. TOGETHER.

2 How do we address the retirement income challenge? 61% of Baby Boomers say they re more afraid of running out of money than they are of dying 1. The opportunity There is no shortage of potential clients asking for your help in determining if, when, and how they ll be able to retire. While some who reach retirement age are opting to continue working, many are looking to you to help them retire in the lifestyle they ve worked so long for and desire. The challenge No one could ve predicted that helping people retire would become so challenging and daunting. Yet it has. The Retirement Income Challenge For investors Consistent retirement income Not running out of money Flexibility and control For advisors More demands on time and resources No single, magic bullet solution Growing the business as retirees draw down portfolios Retirees ask: Have I saved enough money to live the lifestyle I want? Will my money last as long as I live? How can I maintain control of my portfolio and make changes when I need to? Advisors tell us they are concerned about: Increasing demand for their time, advice, and personalized solutions. Not having a single magic bullet solution to meet client needs over an uncertain period of time. Growing their practice as retirees draw down their portfolios, rather than contribute to them. How, then, do we address the retirement income problem? The answer lies in helping investors get through, not just to, retirement. The Retirement Lifestyle Solution 2 was created to help advisors do just that. 1. Allianz Life Insurance survey cited in Ignites.com article, Boomers Dread Retirement Shortfall: Survey, June 21, Russell Investments Retirement Lifestyle Solution TM, which is based on Russell Investments Adaptive Investing TM approach to managing retirement assets, utilizes Russell Investments planning tool, investments solutions and Advisory Services. Although designed to do so, the Retirement Lifestyle Solution TM may not adequately address a retiree s lifestyle needs in retirement. Investments and strategies are not guaranteed by Russell Investments.

3 How will you respond when your client asks, Will I outlive my money? Retirement Lifestyle Solution The Retirement Lifestyle Solution TM is a program designed specifically for advisors who are working to address retirees three major concerns: consistency, sustainability, and flexibility. By utilizing the program, your practice will benefit because it is designed to be: Retirement Lifestyle Planner Retirement Lifestyle Solution Investment solutions Scalable so that you can do more, more efficiently. Transformational helping you engage in meaningful conversations and differentiate your practice. An asset consolidation opportunity another way to grow your business as you help retirees consolidate assets. The program consists of a three-pronged framework: Retirement Lifestyle Planner a web-based planning and implementation tool that creates a tailored plan for each client. Russell Investments solutions globally diversified portfolios with a range of asset allocations that can help you manage your clients assets through time to support their retirement spending goals.* Advisory Services provides tools to help you build your business, have meaningful conversations with your client and implement the program. Retirement Lifestyle Solution TM Designed especially for investors who are in or near retirement: Are 50+ years old Depending on their age, need to withdraw between 3-8% of their nest egg annually Are comfortable with a systematic withdrawal plan Can afford to take on some risk in their portfolio Advisory Services *While the Russell Investments portfolios that are included as part of the Retirement Lifestyle Solution TM are the same investment solutions you are probably already familiar with and utilizing for pre-retirement wealth accumulation, when included as part of a Retirement Lifestyle Plan, they are intended to contribute to sustainable, but not guaranteed, withdrawals over the life of the plan.

4 How do you know if your client can cover their expenses? Start by planning, continue to monitor The Retirement Lifestyle Solution TM helps you actively monitor and manage the risk that clients who are in or near retirement will outlive their assets. Establishing a simulated annuity goal for each retiree is a critical component of Russell Investments approach. It is based on the premise that as long as the portfolio value is greater than the simulated annuity floor, the retiree can withdraw consistent, sustainable income while maintaining flexibility and control (see chart below). A simple metric known as the funded ratio can help show if they have a surplus or shortfall relative to this floor. By using the Retirement Lifestyle Planner, an easy-to-use webbased planning and implementation tool, you ll be able to monitor your client s progress. By investing with the goal of keeping their portfolio above the cost of a simulated lifetime annuity, you can help them maintain flexibility to make changes as needed while maintaining a backup plan. What is the funded ratio? The funded ratio a metric which is used most commonly within defined benefit plans helps advisors determine how well a client is positioned to meet their retirement income needs. The funded ratio can help answer a retiree s three tough questions: How much can I spend? Will my money last? Am I on track? SURPLUS SHORTFALL Portfolio balance (average return) You don t want the portfolio to fall below the annuity cost. It s a simple calculation: Total assets* divided by total spending need** What does it mean? A funded ratio >100%: the retiree s plan is considered funded and the retiree should have enough assets relative to the spending goal, assuming no extreme or unexpected events occur. A funded ratio <100%: the retiree s plan may be underfunded and the retiree may be at risk of outliving their assets unless some actions are taken to mitigate that possibility. Money Age Simulated annuity cost *Total assets is the sum of current and long-term assets owned. **Total spending includes discounted present values for desired lifestyle spending. IMPORTANT: This chart is for illustrative purposes only. The projections or other information generated by Russell Investments regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Source: Russell Investments

5 How are you managing retirement assets? Consider a responsive approach For more than 40 years, Russell Investments has applied its strategic market insights, global money manager research, and rigorous investment process to create and implement assetallocated portfolios for some of the largest institutional investors. Our institutional heritage allows us to be at the forefront of investment innovations, like Russell Investments Adaptive Investing. Russell Investments Adaptive Investing, a responsive approach to managing retirement assets: Utilizes the investor s funded ratio to measure their risk capacity vs. risk tolerance Enables the advisor to adapt asset allocation through time based on changes in the investor s portfolio and spending behavior Considers many of the risks like market volatility retirees encounter Enables investors to take sustainable, but not guaranteed, withdrawals and have the potential to implement other retirement income strategies over the life of the plan. Retirement Lifestyle Planner and Russell Investments solutions in Retirement Advisors can implement the Russell Investments Adaptive Investing approach through the Retirement Lifestyle Planner and through Russell Investments Canada Limited. Our investment solutions include a series of globally diversified portfolios that have a range of asset allocations. Because Russell Investments solutions are comprised of mutual funds, your clients maintain the control and flexibility that s critically important to them at this stage in their lives. Start your retirement conversations with the Retirement Lifestyle Planner 1. Gather and understand investor personal information and assets 2. Determine desired spending goals 3. Assess feasibility of various withdrawal rates and investment alternatives 4. Compare portfolio and asset allocation recommendations 5. Select and generate Retirement Lifestyle Plan

6 Ready to potentially scale, transform, and grow your business? Easy to get started Go to russellinvestments.com/ca/rlp to find content that will help you get started today, including: Retirement Lifestyle Planner Advisor brochure Investor brochure: Investing in retirement To learn more about the Retirement Lifestyle Solution TM, contact your Russell Investments Canada Limited s representative, call or visit russellinvestments.com/ca/rlp

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8 Important information THIS PUBLICATION IS INTENDED FOR INVESTMENT ADVISORS ONLY AND IS NOT INTENDED FOR, NOR CAN IT BE PROVIDED TO, INVESTORS, OR POTENTIAL INVESTORS. IT DOES NOT CONSTITUTE A SALES COMMUNICATION AS DEFINED BY NATIONAL INSTRUMENT , MUTUAL FUNDS. Nothing in this publication is intended to constitute legal, tax securities or investment advice, nor an opinion regarding the appropriateness of any investment nor a solicitation of any type. This is a publication of Russell Investments Canada Limited and has been prepared solely for information purposes. It is made available on an as is basis. Russell Investments Canada Limited does not make any warranty or representation regarding the information. Russell Investments is the operating name of a group of companies under common management, including Russell Investments Canada Limited. Russell Investments ownership is composed of a majority stake held by funds managed by TA Associates with minority stakes held by funds managed by Reverence Capital Partners and Russell Investments management. Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the FTSE RUSSELL brand. Copyright Russell Investments Canada Limited All rights reserved. Date of first publication: April Revised: September Retail [EXP ] PCG-REP-COL-006E (1 08/17)