Retirement Income Strategies

Transcription

1 Retirement Income Strategies from USAA Wealth Management September 21, 2012 G. Keener Gill, Jr. CFP AVP Wealth Management Region Executive

2 Views and opinions expressed in this seminar are provided for informational purposes only and are subject to change. This discussion should not be considered a recommendation, tax, legal or other estate planning advice, but rather a general overview of the subject matter discussed. Consult with your tax, legal or estate planning professional regarding your own specific situation. Examples given are hypothetical illustrations and not necessarily an indication of the benefits or features of any USAA product. Diversification and asset allocation are investment strategies and do not protect against losses or guarantee that an investor s goal will be met. Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP and CERTIFIED FINANCIAL PLANNER in the United States, which it awards to individuals who successfully complete CFP Board s initial and ongoing certification requirements. USAA Wealth Management is a service of USAA. USAA means United Services Automobile Association and its affiliates. Financial planning services and financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California, License # 0E36312 ), a registered investment adviser and insurance agency and its wholly owned subsidiary, USAA Financial Advisors, Inc., a registered broker dealer. Investments/Insurance: Not FDIC Insured Not Bank Issued, Guaranteed or Underwritten May Lose Value Investing in securities products involves risk, including possible loss of principal. Bank products provided by USAA Federal Savings Bank, Member FDIC

3 About USAA Founded in 1922 by 25 U.S. Army Officers Headquarters in San Antonio, Texas Member-based organization Membership earned through military service and can be passed down through the generations 3

4 USAA MISSION The mission of the association is to facilitate the financial security of its members, associates, and their families through provision of a full range of highly competitive financial products and services; in so doing, USAA seeks to be the provider of choice for the military community. USAA CORE VALUES Service Loyalty Honesty Integrity 4

5 Financial Products and Services Insurance Investments Wealth Management Retirement Advice - Face to Face - Telephone - Internet - usaa.com - Video Telephony Investments/Insurance: Not FDIC Insured Not Bank Issued, Guaranteed or Underwritten May Lose Value Investment and insurance products are not deposits, not insured by FDIC or any government agency, not guaranteed by the Bank. Investments and certain insurance products may lose value. 5

6 About USAA Wealth Management

7 WEALTH MANAGEMENT Capabilities and Core Values Service Loyalty Honesty Integrity Financial Planning Investments Trust Services Insurance Income planning Estate planning Legacy planning Professional management More than 40 years of experience Clear philosophy Foundation management Family management Fiduciary oversight Highest property and casualty industry ratings for financial strength Integrated with estate planning solutions You want someone who s looking out for you USAA Wealth Management brings this level of service, loyalty, honesty and integrity to managing your portfolio. 7 I N S U R A N C E I N V E S T M E N T S R E T I R E M E N T A D V I C E

8 USAA Beliefs Some of our guiding principles: USAA believes that every Member should have a personalized and actionable financial plan that is relevant to his/her station of life and financial position. The plan is the blueprint or roadmap on the journey to the life you want to have in the future. USAA believes Members should take lifestyle and longevity into account to minimize the potential for income shortfalls beyond life expectancy. USAA believes losses due to unforeseen events can significantly impact one s retirement, therefore Members should insure for liability limits that are at least equivalent to their net worth. USAA believes Married Members should ensure adequate income for a surviving spouse in the event of death. USAA believes the Military Survivor Benefit Plan should be elected with the maximum 55% benefit for the surviving spouse in most cases. 8

9 USAA Beliefs Some of our guiding principles: USAA believes diversification across and within asset classes can mitigate risk. USAA also recommends diversity of account types for investments to maximize preferential tax treatment before and during retirement. USAA believes Members should cover basic living needs with guaranteed income sources, supported by a diversified portfolio allocated based on risk, time and needs parameters. USAA believes That periodic reviews of all elements of the plan components are necessary such as: cash flow, savings, personal insurance, property insurance, employee benefits programs and investments. Annual check-ups are recommended. USAA believes Asset consolidation allows Members to simplify portfolio management, and retirement income planning and helps to coordinate and maintain the elements of Members overall financial and legacy plans. 9

10 Retirement Income Strategies

11 Retirement Income Planning Assess income sources Review and reassess Calculate spending needs Design an income distribution plan Identify retirement risks Identify and fill income gaps 11

12 7 Risks to be aware of Risks to Manage in Retirement Retirement Income Cost of Living Ability to leave a legacy Affordability of Healthcare Longevity Market Exposure Long-term Care 12

13 Which is the right strategy for you? USAA or its affiliates do not provide tax advice. Taxpayers should seek advice based upon their own particular circumstances from an independent tax advisor. The information is provided for informational purposes only and is not intended to substitute for obtaining professional financial advice. Please thoroughly research and seek professional representation before acting on any information you may have found in this article. This article in no way attempts to provide advice that relates all personal circumstances. 13

14 Which is the right strategy for you? Answer : It Depends... USAA or its affiliates do not provide tax advice. Taxpayers should seek advice based upon their own particular circumstances from an independent tax advisor. The information is provided for informational purposes only and is not intended to substitute for obtaining professional financial advice. Please thoroughly research and seek professional representation before acting on any information you may have found in this article. This article in no way attempts to provide advice that relates all personal circumstances. 14

15 Set a Withdrawal Order Fully taxable savings and investments Tax-free municipal bonds Growthoriented stocks and stock mutual funds Nondeductible traditional IRAs and annuities Employer plans and deductible IRAs Roth IRAs 15

16 Withdrawal Options Substantially equal periodic payments (SEPPs) Spend the income, conserve the principal Spend down over estimated life expectancy Withdraw a set percentage of your portfolio s value 16

17 What Percentage? % Withdrawn annually Number of years before assets are gone 3% 38 4% 28 5% 21 6% 17 7% 8% 9% 10% Assumptions Portfolio invested 40% in stocks and 60% in bonds Financial markets perform as they did over the ten year period (2000 through 2009) Actual earnings would vary from year to year. If the withdrawal percentage is consistently lower than the annual return, assets will last indefinitely. As interest rates rise, existing bond prices fall. Past performance is no guarantee of future results. Examples given are hypothetical illustrations and not an indication of the benefits or features of any USAA product and should not be considered a recommendation. Investing in securities products involves risk, including possible loss of principal. Source: NPI. 17

18 Schedule an appointment to review your legacy planning strategy New to USAA Wealth Management? Request a complimentary consultation Ask us about USAA s full line of financial solutions Next Steps USAA Wealth Management is a service of USAA. USAA means United Services Automobile Association and its affiliates. Financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California, License # 0E36312), and USAA Financial Advisors, Inc., a registered broker dealer.