Comparing a Bucket Strategy and a Systematic Withdrawal Strategy
|
|
- Kathryn Daniel
- 5 years ago
- Views:
Transcription
1 Comparing a Bucket Strategy and a Systematic Withdrawal Strategy By Noelle E. Fox Article Highlights Advisers often present retirees with either a systematic withdrawal strategy or a bucket strategy. A systematic withdrawal strategy may require less time to create and maintain. A bucket strategy may help investors feel more confi dent that their savings will last throughout their retirement years. One of the most important services financial professionals offer their investors may be a well-structured and sustainable retirement income strategy. Considering the many methods for structuring such a strategy, this process may be overwhelming to retirees and financial professionals alike. The risks in retirement are different from the risks an investor may have faced while accumulating retirement assets, and often a retiree needs help to thoroughly understand and evaluate these differences. A financial professional s guidance can be of great help throughout this process. One approach to developing a retirement income plan is the bucket strategy. A bucket strategy segments retirement assets by certain categories. Categories may be based on the risk level of the assets, the needs or expenses these assets are expected to cover or the period of time in retirement when the assets are expected to generate income. The most widely used bucket strategy is the time-segmentation approach, which is used by almost one-third (28%) of financial professionals, according to the Financial Planning Association. This approach assigns each bucket to a defined time period in retirement, based upon the retiree s risk tolerance and time horizon. It anticipates that the allocation will shift over time to traditionally more conservative asset classes as the retirement savings are drawn down. This article analyzes the potential advantages and shortfalls of the time-segmented bucket strategy, which we refer to here as simply the bucket strategy, by comparing it to the most common strategy in use systematic withdrawals. The two strategies are compared based on the psychological and economic benefits they can offer a retiree. More on the Bucket Strategy While the bucket strategy will have buckets of funds designated for use in specific retirement time periods, there are other attributes that will create differences among particular strategies. Depending on the preference of the investor, the funds may be redistributed among buckets more or less frequently. Generally, most bucket strategies also have a target for how much cash and short-term investments to keep on hand for current spending needs the basis for this target may differ by method. To better understand the bucket strategy, we demonstrate it with an example that utilizes three buckets, as shown in Figure 1. When initially established, the first bucket contains cash and cash equivalents and is intended to be utilized and contain sufficient funds to meet spending over the first five years of retirement. The second bucket is intended to meet spending needs in years six to 15 of retirement. It contains mostly fixed-income securities, which are likely to experience greater volatility than cash, but, because they are in the second bucket, the retiree has a longer time period to ride out market swings. The third bucket contains mostly equities, a traditionally more risky and volatile asset class. It is intended to meet expenses in the years beyond the 15th year of retirement, again providing opportunity to ride out swings with the intention of reaping the potential rewards. 7
2 Figure 1. The Bucket Strategy These buckets will need to be redistributed over time. At a regular frequency, the first bucket will need to draw from the second to continue to meet its intended use of covering expenses over the next five-year period. For the second bucket to continue to meet its intended use, it will need to draw from the third. Should market returns create sufficient balances to meet each bucket s objective, a redistribution among buckets would not occur. The balances of each bucket would be analyzed at a regular frequency, and, if a certain target balance isn t met, then a redistribution would occur. Psychological Benefits According to an AARP bulletin, the majority of people fear running out of money in retirement more than they fear death. It s no wonder many people look to financial professionals for help as they enter retirement. While working with a financial professional on any type of retirement income strategy can help a retiree feel more confident in his or her plan, research conducted by HSBC has shown that the bucket strategy may provide some additional psychological benefits. A bucket strategy can address a human preference for smaller, simplified issues, according to finance professor Meir Statman. For retirees feeling overwhelmed by the many decisions they face as they enter retirement, a bucket strategy may help them divide what they see as one large, stress-inducing problem into smaller, more manageable pieces. A bucket strategy that links portions of money directly to goals may also promote self-control, according to the Retirement Income Journal. This can serve as a form of mental accounting, much like a budgeting method using envelopes. By setting aside a budgeted amount of money each month for specific purposes, like groceries, people may find it easier to stay disciplined and spend within a budget. With a bucket strategy, a retiree would use a smaller portion of his or her savings that is designated for income in the short term rather than the entire retirement balance. The designated bucket may help the retiree feel more in control, since creating a sustainable income stream from a large pool of assets can often be a daunting task. While creating a strategy for retirement can help inspire confidence and possibly reduce stress, a systematic withdrawal strategy may have fewer psychological benefits than a bucket strategy. Even when structured with a 4% to 5% withdrawal rate and asset allocation, systematic withdrawals lack the structure of a bucket strategy. As a result, a systematic withdrawal strategy tends to provide fewer psychological benefits. Because money isn t segmented to directly linked goals, the plan may still feel overwhelming to a retiree. Viewing the total account balance rather than the smaller portion intended for short-term use may lead to more dramatic overreaction when account balance swings occur. An Economic Comparison It s also important to compare economic benefits associated with each strategy. For example, for a less timeintensive retirement income strategy, a systematic withdrawal strategy from a target date mutual fund may be set up. With target date funds, the portfolio managers invest in generally more aggressive underlying assets, such as equities, when the target date, which is intended to be an individual s retirement date, is far away. The portfolios gradually become more conservative by shifting their allocations from equity to fixed-income assets as the target date approaches. It is expected that the target date is the date at which the individual will begin withdrawing money. Once in retirement, target date funds generally assume the value of the account will be withdrawn gradually over time. Some funds continue to increase their allocation to traditionally more conservative asset classes beyond the target date, while others do not. Generally, neither the principal nor the underlying assets of target date funds are guaranteed at any time, including the target dates. Investment risk remains at all times. In this example, we consider a target date fund set up for investment through retirement, not just to the target date. The mix of investments gradually shifts to traditionally more conservative asset classes as the retiree ages. At a very basic level, a bucket strategy would replicate this outcome. Based on the established timeline, assets would shift from more aggressive buckets designed for long-term use to traditionally more conservative buckets designed for short-term spending needs. The short-term bucket is generally designed to provide a steady, inflationadjusted income similar to a systematic withdrawal strategy from the target date fund. Structured correctly, these two strategies a bucket strategy and systematic withdrawals from a target date fund could have a similar result, as shown in Figure 2. In the real world, a bucket strategy will probably not perfectly mimic a 8 AAII Journal
3 Figure 2. Sustainability of a 5% Inflation-Adjusted Withdrawal Rate From a Target Date Fund* systematic withdrawal strategy from a target date fund. In part, this is because a bucket strategy reallocates differently than a target date fund. Bucket strategies redistribute funds only from the bucket containing more aggressive assets to less risky buckets, not the reverse. On the other hand, target date funds rebalance to a predetermined asset allocation. If high-quality, shortterm bonds in the first bucket experienced a great year, the bucket strategy would likely not redistribute funds. The key is for the bucket to achieve its goal of maintaining cash on hand to cover the next five years of retirement. However, in the same scenario, a target date fund would rebalance some of the gains to other asset classes with potentially greater risk and return potential. Said another way, a bucket strategy sets asset allocation based on market movements, while a target date fund sets asset allocation based on a glide path intended for a certain investor age. For example, assume traditionally more aggressive investments performed very well in a given year, leading to large end-of-year account balances in the riskier portion of the allocation. If using the bucket strategy, funds would not redistribute. Redistribution would occur only if the shorter-term buckets were not meeting their intended objectives. On the other hand, a target date fund would rebalance back to the targeted asset allocation, likely reducing the large balance in the riskier investments. This difference will cause the asset allocations of the bucket strategy and target date fund to increasingly differ from one another over time. Customization may lead to other differences between the two strategies. In some situations, a retiree may prefer to redistribute among the buckets more or less frequently than a target date fund rebalances. A target date fund will likely have allocation targets that change annually. Another preference may be the specific target to set for cash and short-term investments. One retiree may consider five years of future income to be the right amount of funds to store in short-term investments for immediate use, while another might prefer a three-year horizon. This decision will have a large impact on how the asset allocation changes through retirement. To see how these key differences may impact income sustainability through retirement, variations of bucket strategies have been modeled against a hypothetical target date fund with systematic withdrawals. Both methods aim to provide a 5% initial withdrawal, increased by 3% each year to help offset inflation. We project the probability of still having remaining retirement funds as assets are drawn down from 15 to 35 years into retirement. The next two figures isolate the potential impact of two key bucket strategy levers: the frequency of redistribution and the number of years covered by the cash target. Figure 3 shows the differences created by varying the frequency of redistribution among the buckets. In each of the bucket strategies, the cash target has been held constant, aiming to always keep five years of future income in cash and short-term investments. In Figure 3, you can see the potential impact of two key differences between a bucket strategy and a target date fund. First, the bucket strategy redistributes among buckets, while the target date fund rebalances. In a bucket strategy, funds never move from a traditionally more conservative bucket to a more risky bucket. Accordingly, this strategy may tend to become conservative early, thus making it difficult to sustain income throughout retirement. Second, while the target date fund rebalances regularly, the bucket strategy may redistribute less frequently. Figure 3 shows that less frequent redistribution may help income sustainability. Less frequent redistribution may allow the bucket strategy to stay invested in tradi- 9
4 Figure 3. Sustainability of Income From a Target Date Fund* Vs. Bucket Strategies With Varying Redistribution Frequencies tionally more risky investments instead of redistributing to more conservative investments. Redistributing, especially at a higher frequency, may cause the bucket strategy to hold more cash and experience lower returns over the long term as compared to a target date fund. Next, Figure 4 looks at another key lever: the number of years covered by the cash target. The frequency of redistribution is held constant for this diagram, redistributing every three years. This way, the potential impact from a higher or lower cash target can be seen in isolation. In Figure 4, the bucket strategy shows better outcomes when a lower cash target is used. The lower cash target means fewer assets shift to more conservative investments, encouraging the portfolio to earn a higher average return over the long term and potentially creating better odds of meeting income needs throughout retirement. Figure 4 shows that a bucket strategy may perform better with a lower cash target, but it also shows that a systematic withdrawal from a target date fund could perform even better. Because a bucket strategy redistributes funds among buckets rather than rebalancing, it shifts the overall portfolio to a traditionally less risky allocation compared to that in a target date fund. Redistributing less frequently and setting a lower cash target may keep this shift from occurring too quickly, causing the bucket strategy to potentially perform more like the systematic withdrawal strategy. Of course, this isn t an exhaustive analysis of bucket strategies. Should a retiree want to use either a bucket strategy or a target date portfolio with systematic withdrawals, there are myriad ways the strategy could be customized to meet his or her needs. A key takeaway, however, is that while you may expect the economic benefits of the more timeintensive bucket strategy to trump those of a systematic withdrawal approach, they may not. A systematic withdrawal strategy can be just as sustainable for the retiree and less time intensive. Trade-Offs Both the bucket strategy and systematic withdrawal methods have pros and cons. While a bucket strategy may be more time intensive, it may also structure a regular retirement income plan check-up through the redistribution. The redistribution process sets a designated frequency to evaluate the portfolio. A simpler plan may go unchecked for long periods of time. A bucket strategy may also give the retiree more psychological benefits, if he or she feels that the buckets of money are easier to maintain when directly linked to goals. While a systematic withdrawal approach may make just as much sense financially, a retiree may simply feel more secure with a bucket strategy. The bucket strategy may also help extremely risk-averse investors, who may not elect to invest in any stocks, to take a more long-term approach to investing. As Figures 2 through 4 show, it may be necessary to have some retirement funds allocated to traditionally riskier investments to help support income through retirement. By segmenting the buckets by time of intended use, more risk-averse investors may feel more comfortable with a balanced portfolio. Problems Left to Solve Navigating through the new experiences and risks in retirement will often involve more than just developing a retirement income strategy. The strategies highlighted in this article naturally involve various forms of risk, which a retiree should discuss with their financial professional. Five key retirement risks include: longevity, market performance, with- 10 AAII Journal
5 Figure 4. Sustainability of Income From a Target Date Fund* Vs. Bucket Strategies With Varying Cash Targets drawal rate, inflation and health care. Both a bucket strategy and a target date fund, through thoughtful planning, may help to mitigate market performance, withdrawal rate and inflation risk; however, these risks are not completely negated. Diversification and regular rebalancing may decrease the impact of market volatility, but the risk of losing money will still exist. A financial professional might recommend a sustainable withdrawal rate, generally 4% to 5% with adjustments each year for inflation, but investors may not heed this guidance. While a good retirement income plan should recognize inflation risk, the strategies highlighted in this article cannot completely protect against drastic increases in the cost of living over a retirement that may last 30 years or more. Neither strategy will protect against the risks of longevity or health care. However, both strategies should include a reasonable, inflation-adjusted withdrawal rate, which seeks to protect against running out of funds at an old age. Either strategy could do more to account for longevity risk by incorporating a guaranteed product, like an annuity or longevity insurance. The risk of health care expenditures in retirement should be considered. In short, it s important for retirees to have direct discussions with their financial professionals about the issues faced when entering retirement. While many risks can be mitigated, the retiree must understand that no plan is perfect and regular maintenance is crucial. Conclusions A bucket strategy is one logical way to structure a retirement income plan. By creating budgets with categories of funds, investors may gain psychological benefits from the mental accounting behind the bucket strategy. While an investor may feel more secure with money segmented and designated for future use, the strategy may not provide financial benefits beyond what may be accomplished with a less complicated strategy. Structuring systematic withdrawals from a target date fund can be a straightforward strategy for creating retirement income for some investors. When considering a bucket strategy or systematic withdrawals for retirement income, certain trade-offs should be considered. A bucket strategy can be time intensive to implement and maintain; however, it encourages regular maintenance of the retirement income strategy, which is critical. For an especially risk-averse retiree, it may allow acceptance of a more risky portfolio. No product or strategy is the single best choice for all retirees. Financial professionals play a critical role during the transition into retirement, discussing the new risks a retiree faces and helping structure a strategy to help the retiree receive income he or she needs through retirement. The retirement income strategies financial professionals structure for investors whether they use a bucket strategy, a systematic withdrawal strategy or some other method must be based on individual investor needs and risk tolerances. The end result is that, with the help of a financial professional, retirees may spend less time worrying about income sustainability and more time enjoying their well-deserved retirement years. Noelle E. Fox is a practice leader in the Retiree Services Division of Principal Financial Group. Find out more at authors/noelle-fox. 11
4 Strategies for Retiring Clients
Sustaining Income Through Retirement: 4 Strategies for Retiring Clients ExecutiveSummary Over the next 15 to 20 years, baby boomers are expected to reallocate nearly $8.4 trillion in retirement assets
More information50% 21%of those INVESTING FOR YOU: 5 CRITICAL QUESTIONS FOR EVERY INVESTOR ... More. than
INVESTING FOR YOU: 5 CRITICAL QUESTIONS FOR EVERY INVESTOR People spend a lot of time worrying about finding the best investment. They pick a bond, mutual fund or stock and then second-guess themselves
More informationFPO THE VALUE OF INTEGRATING RETIREMENT ASSETS: CREATING A RELIABLE INCOME IN RETIREMENT
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY (NORTHWESTERN MUTUAL) THE VALUE OF INTEGRATING RETIREMENT ASSETS: CREATING A RELIABLE INCOME IN RETIREMENT FPO 90-2596 (1016) You save and sacrifice throughout
More informationRBC retirement income planning process
Page 1 of 6 RBC retirement income planning process Create income for your retirement At RBC Wealth Management, we believe managing your wealth to produce an income during retirement is fundamentally different
More informationGuide to Retirement Plan Investing Basics
Guide to Retirement Plan Investing Basics WHAT S YOUR STRATEGY? Saving for retirement might be the most important thing you ever do with your money. When saving for retirement, you ll make some decisions
More informationSchwab Target Date Funds. So you can enjoy today We help you invest for your future
Schwab Target Date Funds So you can enjoy today We help you invest for your future Schwab Target Date Funds All-in-one portfolio solution. More time for you. Schwab Target Date Funds are diversified mutual
More informationDavid M. Jones, MBA, CFP
White Paper: How Traditional Investing Can Fail Baby Boomers David M. Jones, MBA, CFP www.selectportfolio.com Toll Free 800.445.9822 Tel 949.975.7900 Fax 949.900.8181 Securities offered through Securities
More informationThe oldest members of the 78 million U.S. baby
A Framework for Managing Retirement Income GWM INVESTMENT MANAGEMENT & GUIDANCE FALL 2009 You ve probably spent most of your life focusing on the accumulation of assets. In retirement, however, you need
More informationDeferred Income Annuities
Deferred Income Annuities Creating a future income stream that s guaranteed for life. Fixed annuities available at Fidelity are issued by third-party insurance companies, which are not affiliated with
More informationP-Solve Update By Marc Fandetti & Ryan McGlothlin
Target Date Funds: Three Things to Consider P-Solve Update By Marc Fandetti & Ryan McGlothlin February 2018 Target Date Funds (TDF) have become increasingly important to the retirement security of 401(k)
More informationINVESTMENT GUIDE. Table of Contents. Introduction About Savings Plus... 1 How to Invest for Your Retirement... 1
INVESTMENT GUIDE INVESTMENT GUIDE Table of Contents Introduction About Savings Plus... 1 How to Invest for Your Retirement... 1 Section 1: Asset Allocation Two Key Elements of Asset Allocation... 3 How
More informationSPIAs. Single Premium Immediate Annuities. Annuity Product Guides. Convert your retirement savings into a guaranteed lifetime income stream
Annuity Product s SPIAs Single Premium Immediate Annuities Convert your retirement savings into a guaranteed lifetime income stream Modernizing retirement security through trust, transparency and by putting
More informationMoving From Inertia to Income: Insights Into Delivering Successful Retirement Outcomes
Retirement Insights Retirement income Moving From Inertia to Income: Insights Into Delivering Successful Retirement Outcomes One of the most complex tasks people face today is financial planning for retirement.
More informationPLANNING FOR THREE BIG RISKS TM IN RETIREMENT
An Investment Strategy with the Objective of Providing Inflation-Adjusted Income for Life. PLANNING FOR THREE BIG RISKS TM IN RETIREMENT TIMING RISK INFLATION RISK LONGEVITY RISK Copyright 2016 Wealth2k,
More informationInvesting basics. Shelly Maas, Merrill Lynch Financial Wellness Specialist. June 15, 2018
Investing basics Shelly Maas, Merrill Lynch Financial Wellness Specialist June 15, 2018 Merrill Lynch makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated
More informationPlanning for Income to Last
Planning for Income to Last Retirement Income Planning Not FDIC Insured May Lose Value No Bank Guarantee This guide explains why you should consider developing a retirement income plan. It also discusses
More informationJust the Facts: Investing
Let s Start Today Just the Facts: Investing Inspired by 1. Are you ready to start investing? Find out. Take an inventory of where you are today. Protect yourself with savings in case you encounter: Losing
More informationPrincipal LifeTime portfolios. Investment options that strive to keep pace with life
LifeTime portfolios Investment options that strive to keep pace with life Most of us need a little help when it comes to saving for retirement. If you re like many, you may not have the time or interest
More informationDrawdown: the guide Drawdown: the guide 1
Drawdown: the guide Drawdown: the guide 1 Drawdown versus annuity Drawdown offers extra flexibility and the potential for better returns or more income from a pension pot - given the relatively low returns
More informationGuaranteed income for life. In any market.
Guaranteed income for life. In any market. Schwab Retirement Income Variable Annuity with optional Guaranteed Lifetime Withdrawal Benefit. A variable annuity from Charles Schwab, issued by Pacific Life.*
More informationUBS Financial Services Inc.
UBS Financial Services Inc. Retirement Plan Asset Allocation Guide Planning how to invest for your retirement may be one of the most important decisions you ll ever make. Asset allocation is a strategy
More informationDetermining Your Investor Risk Profile
Asset Allocation Risk Profile Questionnaire Determining Your Investor Risk Profile Accumulate Grow your wealth while managing risk. Plan Protect Access NOT A DEPOSIT NOT FDIC INSURED NOT GUARANTEED BY
More informationA powerful combination: Target-date funds and managed accounts
A powerful combination: Target-date funds and managed accounts Summer 2016 Executive summary Salt and pepper Rosemary and thyme Cinnamon and nutmeg Great chefs often rely on classic combinations to create
More informationPlease complete the questionnaire in full (questions one to 14). 1. What is the intent of your portfolio? Please select the most appropriate one.
Investment Voyager can help Whatever your stage of life, successful investment planning takes an honest assessment of your investment knowledge and your comfort with risk. It also considers the number
More informationWhat Works. Our time-tested approach to investing is very straightforward. And we re ready to make it work for you. Three important steps.
What Works Our time-tested approach to investing is very straightforward. And we re ready to make it work for you. Three important steps. Ten effective principles. Three important steps. Ten effective
More informationPersonal Finance REBALANCING CAN HELP MITIGATE MARKET RISK
PRICE PERSPECTIVE February 17 In-depth analysis and insights to inform your decision-making. Personal Finance REBALANCING CAN HELP MITIGATE MARKET RISK EXECUTIVE SUMMARY The global equity markets have
More informationUNDERSTANDING RETIREMENT PLANNING
UNDERSTANDING RETIREMENT PLANNING According to a 2012 Pew Research survey, more than 50 percent of individuals between the age of 36 and 40 worry that they will not have enough money saved up for retirement.
More informationPlanning for income to last
For Investors Planning for income to last Retirement Income Planning Understand the five key financial risks facing retirees Determine how to maximize your income sources Develop a retirement income plan
More informationRetirement Matters: Distributions from Retirement Plans. Slide 1
Slide 1 If you re like many Americans, you ve been setting aside money for your retirement. Now that you re nearing retirement age, it may soon be time to start drawing money from your qualified retirement
More informationTHE UNIVERSITY OF VERMONT TAX-DEFERRED ANNUITY PLAN
THE UNIVERSITY OF VERMONT TAX-DEFERRED ANNUITY PLAN TWO EASY WAYS TO PICK YOUR INVESTMENTS Saving for retirement is a commitment you need to make to yourself for your future financial security. We re here
More informationTime Segmentation as the Compromise Solution for Retirement Income
Time Segmentation as the Compromise Solution for Retirement Income March 27, 2017 by Wade D. Pfau The Financial Planning Association (FPA) divides retirement income strategies into three categories: systematic
More informationRetirement Income Planning With Annuities. Your Relationship With Your Finances
Retirement Income Planning With Annuities Your Relationship With Your Finances There are some pretty amazing things that happen around the time of retirement. For many, it is a time of incredible change,
More informationThe Navigator. September 2016 Issue 9. Variable Annuities. A Financial Planning Resource from Pekin Singer Strauss Asset Management
The Navigator A Financial Planning Resource from Pekin Singer Strauss Asset Management September 2016 Issue 9 Variable annuities are highly complex financial instruments that, despite their popularity,
More informationThe MassMutual Single Premium Immediate Annuity (SPIA) Synergy Study
A Research Report for Individuals The MassMutual Single Premium Immediate Annuity (SPIA) Synergy Study New Planning Approaches and Strategies for the Retirement Income Challenge A Research Report August
More informationONcore Variable Annuities
ONcore Variable Annuities Plan Accumulate Protect Access Table of Contents 2 Plan Overcome Risk Through Planning 6 Accumulate Accumulate Wealth and Manage Risk Using ONcore Variable Annuities 8 Protect
More informationDetermining a Realistic Withdrawal Amount and Asset Allocation in Retirement
Determining a Realistic Withdrawal Amount and Asset Allocation in Retirement >> Many people look forward to retirement, but it can be one of the most complicated stages of life from a financial planning
More informationTake control. Help your clients understand the role of risk control in a portfolio A GUIDE TO CONDUCTING A RISK CONTROL REVIEW
A GUIDE TO CONDUCTING A RISK CONTROL REVIEW Take control Help your clients understand the role of risk control in a portfolio MGA-1658740 FOR REGISTERED REPRESENTATIVE USE ONLY. NOT FOR USE BY THE GENERAL
More informationImmediate Fixed Income Annuities
Immediate Fixed Income Annuities Creating an immediate income stream that s guaranteed for life. Fixed annuities available at Fidelity are issued by third-party insurance companies, which are not affiliated
More information20 Keys to Being a Smarter Investor
20 Keys to Being a Smarter Investor FAMILY PLANNING EDUCATION INVESTMENT RETIREMENT SAVING EQUITY FAMILY PLANNING EDUCATION INVESTMENT RETIREMENT SAVING EQUITY FAMILY PLANNING EDUCATION INVESTMENT RETIREMENT
More informationRetirement Matters: Retirement Living. Slide 1
Slide 1 Retirement living conjures up various images. Some see retirement living as traveling. Others envision more family time. Still others simply look forward to more free time. No matter what your
More informationRetirement Income Showdown: RISK POOLING VS. RISK PREMIUM. by Wade D. Pfau
Retirement Income Showdown: RISK POOLING VS. RISK PREMIUM by Wade D. Pfau ABSTRACT The retirement income showdown regards finding the most efficient approach for meeting retirement spending goals: obtaining
More informationCalPERS SCP POFF Rollover. Your choice, simplified. Welcome Kit
CalPERS SCP POFF Rollover Your choice, simplified. Welcome Kit Table of Contents Understanding Your CalPERS SCP POFF Rollover 2 Getting Started What s your investment strategy? Introducing your fund options
More informationRetirement Strategies for Women RETIREMENT
Retirement Strategies for Women RETIREMENT Contents Retirement Facts for Women... 1 Planning for Retirement...3 Financial Net Worth...4 Cash Flow...5 What Is Important to You?...6 10 Ways to Put Your House
More informationRSPP Exp 1/23/2019. Transition. Magellan Health, Inc. Retirement Savings Plan. Place client logo here
0286146-00002-00 Exp 1/23/2019 RSPP470 Transition Presented by Daniel Dionne. CRC Place client logo here Magellan Health, Inc. Retirement Savings Plan This presentation is intended to provide information
More informationIBM 401(k) Plus Plan. Individual Fund Flyer Conservative Fund
IBM 401(k) Plus Plan Individual Fund Flyer Conservative Fund This investment option is a unitized fund and not a mutual fund and as such is not registered with the Securities Exchange Commission (SEC).
More informationDow Australia Superannuation Fund A guide to your super Account-Based Pension members
Dow Australia Superannuation Fund A guide to your super Account-Based Pension members ISSUED: 30 SEPTEMBER 2017 Contents Your retirement options 1 The Account-Based Pension Section 2 Joining the Account-Based
More informationCLS ADVISOR IQ SERIES MAKING RETIREMENT INCOME LAST: A ROADMAP FOR GUIDING INVESTORS THROUGH RETIREMENT INCOME ISSUES
CLS ADVISOR IQ SERIES MAKING RETIREMENT INCOME LAST: A ROADMAP FOR GUIDING INVESTORS THROUGH RETIREMENT INCOME ISSUES Table of Contents Executive Summary Introduction The Magic Number Income Considerations
More informationABSTRACT OVERVIEW. Figure 1. Portfolio Drift. Sep-97 Jan-99. Jan-07 May-08. Sep-93 May-96
MEKETA INVESTMENT GROUP REBALANCING ABSTRACT Expectations of risk and return are determined by a portfolio s asset allocation. Over time, market returns can cause one or more assets to drift away from
More informationThe Danger of Getting Out of Stocks During Bear Markets
Feature: Portfolio Strategies The Danger of Getting Out of Stocks During Bear Markets By Charles Rotblut, CFA Article Highlights Not only do losses affect investors more than gains, investors put more
More informationStrategies for staying on track to your retirement
Strategies for staying on track to your retirement TIAA-CREF and you: Planning an income for life For more than 90 years, we at TIAA-CREF have dedicated ourselves to helping those who serve the greater
More informationLife Stages of Accumulation and Decumulation. By: Debbie Rochester, Benefit Education Specialist
Life Stages of Accumulation and Decumulation By: Debbie Rochester, Benefit Education Specialist 2 Today s Agenda Accumulation Factors to Consider in Retirement Planning Investing for Retirement Making
More informationUnderstanding How Much Alternative Assets Your Portfolio Can Handle
Understanding How Much Alternative Assets Your Portfolio Can Handle Managing Liquidity Risk for Private Sector Defined Benefit Plans with De-risking Glide Paths September 2014 Hewitt EnnisKnupp, An Aon
More informationMAKING THE DECISION TO BUY AN ANNUITY IS AN IMPORTANT STEP IN YOUR RETIREMENT PLAN.
MAKING THE DECISION TO BUY AN ANNUITY IS AN IMPORTANT STEP IN YOUR RETIREMENT PLAN. The key is having enough accurate and reliable information so you know you are making decisions that are right for you.
More informationMyFolio. A simpler solution to long-term investing. 1 A simpler solution to long-term investing - MyFolio
MyFolio A simpler solution to long-term investing 1 A simpler solution to long-term investing - MyFolio Contents 03 A simpler solution to long-term investing 04 What s in it for you? 06 Risk. What level
More informationEvaluating Investments versus Insurance in Retirement
Evaluating Investments versus Insurance in Retirement June 30, 2015 by Wade Pfau Retirement-income planning has emerged as a distinct field in the financial services profession. But because it is still
More informationSelf-Directed Management Platform
Self-Directed Management Platform Client Focused Investment Solutions Research Driven Risk Monitored Investing Made Simple Professional Investment Management for all your investment needs and goals. BM012016
More informationMyFolio. A simpler solution to long-term investing
MyFolio A simpler solution to long-term investing Contents 02 A simpler solution to long-term investing 03 What s in it for you? 04 Risk. What level suits you? 05 Want to know your attitude to risk? 06
More informationAdvantage IV Variable Annuity
Advantage IV Variable Annuity IT S ALWAYS THE RIGHT TIME It s never too late to get where you want to go When you begin saving for retirement at the beginning of your career, you re giving yourself the
More informationa roadmap for your retirement
retirement savings a roadmap for your retirement enrollment and review guide AXA Equitable Life Insurance Company (NY, NY) Enrollment and Review Guide This guide, in conjunction with other enrollment materials,
More informationWhat s an Investor Personality?
What s an Investor Personality? Introduction Whether an investor s goal is financial security in retirement or funding post-secondary education for their children, it's important to choose investments
More informationThis risk^ profile questionnaire has been designed for the Select Ready-made portfolios called Selected Portfolios.
Select Wealth Management Limited Risk Profile This risk^ profile questionnaire has been designed for the Select Ready-made portfolios called Selected Portfolios. Investments can only be placed through
More information#2 DECIDE HOW TO INVEST
#2 DECIDE HOW TO INVEST To decide how to invest, choose the investment option that best fits your personality and current situation. As your situation changes over time, you may want to consider changing
More informationUnderstanding How Much Alternative Assets Your Portfolio Can Handle
Understanding How Much Alternative Assets Your Portfolio Can Handle Managing Liquidity Risk for Private Sector Defined Benefit Plans with De-risking Glide Paths September 2014 Risk. Reinsurance. Human
More informationTailor made investment approach
WHAT DOES INVESTING MEAN? 03 GUIDE TO INVESTING - Tailor made investment approach 02 GUIDE TO INVESTING Contents WHAT DOES INVESTING MEAN? 3 UNDERSTANDING YOUR NEEDS AND REQUIREMENTS 5 UNDERSTANDING RISK
More informationThe 15 Minute Retirement Planner
The 15 Minute Retirement Planner!!What do you need?!!where are you Now?!!What do you do to get inside the Curve? The Old Rules Don t Apply Once upon a time, you worked for the same company most of your
More informationAsset Allocation: Projecting a Glide Path
Select Portfolio Management, Inc. www.selectportfolio.com Toll Free: 800.445.9822 Telephone: 949.975.7900 Fax: 949.900.8181 Securities offered through Securities Equity Group, member FINRA, SIPC, MSRB
More informationMANAGE PORTFOLIO VOLATILITY THROUGH DYNAMIC ASSET ALLOCATION
QS Legg Mason Dynamic Multi-Strategy VIT Portfolio Share class (Symbols): Class I (QDMSIX/52467M793), Class II (QDMSTX/52467M785) MANAGE PORTFOLIO VOLATILITY THROUGH DYNAMIC ASSET ALLOCATION A portfolio
More informationFrequently asked questions about TIAA Traditional Annuity
about TIAA Traditional Annuity TIAA Traditional Annuity can provide you with certainty, income you can t outlive and peace of mind. Table of contents: Section 1 Overview Section 2 Interest crediting rates
More informationProtective Variable Annuity Investors Series. Product Profile PAC.5076 (03.16)
Protective Variable Annuity Investors Series Product Profile PAC.5076 (03.16) Protect Tomorrow. Embrace Today.TM Facing the Retirement Savings Challenge We all know how important it is to save and grow
More informationFirst Rule of Successful Investing: Setting Goals
Morgan Keegan The Lynde Group 4400 Post Oak Parkway Suite 2670 Houston, TX 77027 (713)840-3640 hal.lynde@morgankeegan.com hal.lynde.mkadvisor.com First Rule of Successful Investing: Setting Goals Morgan
More informationHow to turn retirement savings into retirement income
How to turn retirement savings into retirement income To avoid outliving your retirement savings, it's important to consider ways to make your money last. You ve saved for your retirement for years. Now
More informationParticipant Asset Allocation: Questionnaire and Core Models
Participant Asset Allocation: Questionnaire and Core Models Morgan Stanley: Aligning Investment Strategy with Long-Term Objectives introduction Table of Contents Asset Allocation Questionnaire How you
More informationTransition to a lifetime of financial security.
A Variable Annuity Guide for Individuals Transition to a lifetime of financial security. MassMutual Transitions Select SM variable annuity Financial security starts with good decisions Your future financial
More informationEnroll today. Enjoy tomorrow. University System of Georgia Benefits 403(b) and 457(b) Retirement Plans SAVING : INVESTING : PLANNING
Enroll today. Enjoy tomorrow. University System of Georgia Benefits 403(b) and 457(b) Retirement Plans SAVING : INVESTING : PLANNING 2 It s your future. Make it the one you envision. As an employee of
More informationPACIFIC LIFE VARIABLE ANNUITIES
PACIFIC LIFE VARIABLE ANNUITIES Plan Your Retirement. Protect Your Family. VAC0229-0518 o WHY CHOOSE A VARIABLE ANNUITY A variable annuity is a long-term contract between you and an insurance company that
More informationMEMBERS Horizon Annuity: New Possibilities for Diversified Investing
MEMBERS Horizon Annuity: New Possibilities for Diversified Investing MHA-1724847(CM) FOR REGISTERED REPRESENTATIVE USE ONLY. NOT FOR USE BY THE GENERAL PUBLIC. 2-0618-0720 2018 CUNA Mutual Group MEMBERS
More informationRetirement Income Planning With Fixed Indexed Annuities. Your Relationship With Your Finances
Retirement Income Planning With Fixed Indexed Annuities Your Relationship With Your Finances There are some pretty amazing things that happen around the time of retirement. For many, it is a time of incredible
More informationBehavioral Finance: The Collision of Finance and Psychology
Behavioral Finance: The Collision of Finance and Psychology Behavioral Finance: The Collision of Finance and Psychology Presented by: Dr. Joel M. DiCicco, CPA Florida Atlantic University Order of Presentation
More informationUBS Financial Services Inc. Retirement Plan Asset Allocation Guide
ab UBS Financial Services Inc. Retirement Plan Asset Allocation Guide Planning how to invest for your retirement may be one of the most important decisions you ll ever make. Asset allocation is a strategy
More informationDependable asset growth on your terms with ATHENE MaxRate 7 Multi-Year Guarantee Annuity (MYGA)
1 Dependable asset growth on your terms with ATHENE MaxRate 7 Multi-Year Guarantee Annuity (MYGA) Issued by: Athene Annuity & Life Assurance Company AN1164-FL (10/14) Your Future Make sound financial decisions
More informationThe Pokorny Group at Morgan Stanley Smith Barney. Your success is our success.
The Pokorny Group at Morgan Stanley Smith Barney Your success is our success. Our Mission With nearly two decades in the brokerage industry, we offer you an insightful and experienced team that is committed
More informationSafe Withdrawal Rates from your Retirement Portfolio
American Association of Individual Investors Silicon Valley Chapter presents Financial Planning Workshop Safe Withdrawal Rates from your Retirement Portfolio Fred Smith fred@fredsmithfinance.com Financial
More informationTHE BASICS OF INVESTING HELPING YOU PAINT A VIBRANT FUTURE
THE BASICS OF INVESTING HELPING YOU PAINT A VIBRANT FUTURE Getting Started Is Easier Than You Think One of the biggest misconceptions about securing your financial future is that you have to be a financial
More informationLVIP T. Rowe Price 2050 Fund. Summary Prospectus May 1, (Standard and Service Class) (formerly, LVIP Managed Risk Profile 2050 Fund)
LVIP T. Rowe Price 2050 Fund (formerly, LVIP Managed Risk Profile 2050 Fund) (Standard and Service Class) Summary Prospectus May 1, 2018 Before you invest, you may want to review the Fund s Prospectus,
More informationFor creating a sound investment strategy.
Five Rules For creating a sound investment strategy. 5 Part one of the two-part guide series Saving Smart for Retirement. The most important decision you will probably ever make concerns the balancing
More informationRetire Without Running Out of Money
Retire Without Running Out of Money An Empirical White Paper focusing on the powerful solutions offered by wealth management. Jack Monteith, Founder, Empirical Wealth Management Good fortune is what happens
More informationThe single fund solution. Continuum Portfolios
The single fund solution Continuum Portfolios The single fund solution At Canada Life, we understand it can be difficult to choose and manage investments that meet your financial goals. That s why your
More informationDecumulation Options in the New Zealand Market: How Rules of Thumb can help
New Zealand Society of Actuaries (Inc) Decumulation Options in the New Zealand Market: How Rules of Thumb can help By the Retirement Income Interest Group of the New Zealand Society of Actuaries (Inc)
More informationUnit 4: Types of Mutual Funds
Unit 4: Types of Mutual Funds Welcome to Types of Mutual Funds. This unit gives you an overview of the types of mutual funds available. Before providing your client with an investment solution, you need
More informationUBS Financial Services Inc. Retirement Plan Asset Allocation Guide
ab UBS Financial Services Inc. Retirement Plan Asset Allocation Guide Planning how to invest for your retirement may be one of the most important decisions you ll ever make. Asset allocation is a strategy
More informationDiversification made easy. Asset Allocation Guide
Diversification made easy Asset Allocation Guide 1 First of all, what s asset allocation? To put it simply, asset allocation is the process of spreading your investment dollars over different types of
More informationComplete your retirement picture with guaranteed income
Complete your retirement picture with guaranteed income ANNUITIES INCOME Brighthouse Income Annuity SM Add immediate income for more certainty. All guarantees are subject to the claims-paying ability and
More informationThe How Do I Save For Retirement Challenge
0278470-00003-00 Exp 12/12/2018 RSPP487 The How Do I Save For Retirement Challenge Presented by Dallas Chastain Place client logo here Magellan Health, Inc. Retirement Savings Plan This presentation is
More information1. Background Introduction
1. Background Introduction April 2017 This guide gives you an overview of the points you should consider before you decide how you should invest your DC contributions. There is a range of funds in which
More informationSTATE FARM 401(k) SAVINGS PLAN 2030 PORTFOLIO Fact Sheet
STATE FARM 401(k) SAVINGS PLAN 2030 PORTFOLIO Fact Sheet for the period ending March 31, 2018 Asset Class: Lifestyle/Pre-mix (Target Date) Closing price: $36.25 Investment Objective The 2030 (the ) seeks
More informationCapital Protection Oriented Schemes - Strategies, Regulation & Rating
Capital Protection Oriented Schemes - Strategies, Regulation & Rating Introduction The Securities & Exchange Board of India (SEBI), in August 2006, released the guidelines for capital protection oriented
More informationINVEST IN TOMORROW. Prudential Managed Account. Strategic Portfolios
INVEST IN TOMORROW Prudential Managed Account Strategic Portfolios LINK by Prudential Connect the dots of your financial life. LINK by Prudential is designed to be there for you throughout your life, no
More informationPension Solutions Insights
Pension Solutions Insights Level 2 LDI: Three key implementation considerations Aaron Meder, FSA, CFA, EA Head of Pension Solutions Legal & General Investment Management America 8755 W Higgins Road, Suite
More informationü ü ü Eliminating the risk of market fluctuation Helping you avoid poor market timing Providing guaranteed income for the rest of your life
Whether you have thought about it yet or not, life in retirement has a new set of financial risks that may keep you from enjoying your time the way you had always dreamed. That s where we come in and offer
More informationRetirement Income Strategies
Retirement Income Strategies An Educational Resource From Solid Rock Wealth Management By Christopher Nolt, LUTCF Introduction Investing wisely for wealth accumulation is one thing, converting those investments
More information