Retirement plans should target income as the outcome
|
|
- Claude Carter
- 8 years ago
- Views:
Transcription
1 Retirement plans should target income as the outcome
2 Forward-thinking plan sponsors are committed to helping their employees reach a secure retirement, and in recent years, they have made great strides in getting employees engaged in their own retirement readiness. Yet too many people are still not prepared. A number of recent surveys have found that: W 43% of Americans are concerned they won t have enough money to live comfortably in retirement. 1 W 45% of workers guess how much to save for retirement, instead of using estimates or calculators. 2 W Just 21% are planning to receive income from annuities, which generate retirement income that individuals can t outlive. 3 To measure retirement readiness, plan sponsors should focus on the ultimate outcome of their plans: the income replacement ratio, or amount of preretirement income an individual will need to live comfortably in retirement. Despite plan sponsors best efforts, many employees are still at a loss a problem that may largely come down to perspective. Traditionally, the industry standard for retirement readiness has been a large nest egg. Employees and plan sponsors alike have focused on growing savings, and retirement planning has addressed how much to save each year, what risks to assume in various investments, and how to avoid fees and other costs that chip away at employees total return. This approach has resulted in little guidance on how employees can turn their nest eggs into retirement income that may have to last for the next 25 or 30 years. Instead of measuring retirement readiness by looking at accumulated savings alone, plan sponsors should focus on the ultimate outcome of their plans: the income replacement ratio, or amount of pre-retirement income individuals will need to live comfortably in retirement. In simpler terms, measuring retirement readiness starts with determining employees expected monthly budget in retirement based on their existing pre-retirement monthly budget. With this metric in mind, plan sponsors can now take a strategic approach to plan design that can help employees meet their income or budgeting needs in retirement. This means considering the individual needs and circumstances of their employees in both the savings (accumulation) and the distribution (decumulation) phases. It starts with giving employees the tools to set the right goals for retirement. An effective plan design then helps employees meet those goals and links to products that yield retirement income streams that will last a lifetime. 1 Retirement plans should target income as the outcome
3 The savings phase How much should employees save for retirement? Experts have different estimates as to what level of pre-retirement income workers should target as a savings goal, but it is important to note that one universal number may not be appropriate for all. Income replacement rates can vary widely from one person to another: In fact, research shows that typical replacement rates can range from as low as 58% to as much as 82% 4 (see Exhibit 1). Exhibit 1: People with higher pre-retirement income have lower replacement rates Replacement rates as a percentage of gross preretirement income Total=82% Total=72% Total=62% 59% 38% 31% W Social Security W Savings Total=58% 21% 23% 34% 31% 37% < 25th < $25,870 25th 50th < $49,941 Gross Preretirement Income 50th 75th < $86,882 > 75th > $86,882 Source: Marlena Lee, The Retirement Income Equation, DC Dimensions (Summer 2012). Note: Dollar figures shown above are in 2011 dollars The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Results may vary with each use and over time. These hypothetical returns are used for discussion purposes only and are not intended to represent, and should not be construed to represent, predictions of future rates of return. Retirement plans should target income as the outcome 2
4 The reality is that each individual may have a different retirement replacement rate and thus may need to save a different amount for retirement. By focusing on income replacement rates as the appropriate retirement goal, plan sponsors can help employees determine how much they need to save based on their expected income needs in retirement. Many factors play a role in determining the actual amount that someone should save: income levels, portfolio returns, number of years until retirement, and current and past savings rates, among others. The reality is that each individual may have a different retirement replacement rate and thus may need to save a different amount. Research indicates that workers on the lower end of the income spectrum will need a relatively high share of their pre-retirement income, but they will require a lower rate of savings during their pre-retirement years. A different story emerges for employees earning more than $100,000 per year; according to this study, they will likely have to save considerably more of their pre-retirement income, despite having a lower overall retirement replacement rate. 5 Due to regulatory savings limitations within defined contribution plans, high-income employees may find it difficult to meet these savings goals through their plans and may have to save outside of them. Savings options outside of the plan include individual retirement accounts (IRAs), fixed annuities and other savings and investing accounts. Plan sponsors should encourage their employees to maximize their retirement savings, with an understanding that their savings rates may fluctuate over their careers. Workers may be unemployed for a period of time, take time off to care for children or elderly parents, or experience financial emergencies that affect their ability to maintain their target savings rate. For this reason, employees need to save more aggressively when they can, to offset those periods when they are forced to save less. 3 Retirement plans should target income as the outcome
5 Plan design focused on outcomes Engaging employees with an income replacement ratio is critical, but plan design is another area where plan sponsors can use their influence to help employees reach their retirement goals. The right elements of plan design can improve participation and savings rates, investment performance and other plan metrics. Three practices that a plan sponsor might consider are the use of automatic features, offering professionally structured investment solutions, and making advice services available. 1. Automatic processes for enrollment and contribution increases: A good starting point is to automatically enroll employees in a defined contribution plan the moment they become eligible. Doing so can save employees from the negative consequences of inertia: Research shows that applying automatic enrollment (as opposed to voluntary plan enrollment) can have a big savings impact for all employees, especially those just starting out in their careers. Workers between the ages of 25 and 29 who are automatically enrolled in their plans could save as much as 2.39 times more of their final salary than their peers who are left to enroll on their own. 6 For those employees who are already enrolled in the plan but perhaps are not saving the amount necessary to reach their target income replacement ratio, dynamic autoescalation which ties savings rates to income replacement ratios can raise savings rates to the appropriate level. The combination of these two automatic processes automatic enrollment and dynamic auto-escalation can help plan sponsors create a more meaningful plan design. This outcome-oriented approach can help accelerate individuals savings at critical junctures, prevent common investor-driven errors tied to market timing and keep employees on track to meet their goals. Retirement plans should target income as the outcome 4
6 We believe the goal of a professionally structured investment solution should be sufficient income to maintain a desired standard of living in retirement. 2. Professionally structured investment solutions: The first step in designing a professionally structured investment solution is to determine a meaningful goal. Many comprehensive investment solutions focus only on inputs such as risk tolerance, performance, fees, investment style and account balances. In other words, the goal of these solutions is wealth accumulation. By contrast, we believe the goal should be sufficient income to maintain a desired standard of living in retirement. Professionally structured investment solutions take into account a wide range of elements to meet employees retirement income goals. Each of these elements is important, as even a relatively small change in performance can have a big impact. We believe an appropriate professionally structured investment solution should: Target income as the outcome. Consider an asset allocation strategy in which the goal is to meet future income needs. Provide broad market exposure that offers employees access to a wide range of asset classes, in order to diversify and target higher expected returns. Consider limiting exposure to company stock (in the case of corporate plans) in order to, among other things, potentially avoid the crowding out effect in which this option competes for an allocation over other asset classes. Use segmentation insights based on age, account balance, earnings potential and retirement funding status to help different employee groups reach their income goals. Strive for a low-cost all-in fee structure that is competitively priced; the goal is not necessarily to obtain the lowest fee for each product or service, but rather to obtain the best value for each of them. Preserve income and avoid relying too heavily on equities as an employee gets closer to retirement and his or her earnings potential is low or depleted. Provide the opportunity to convert assets to lifetime income. This could include the use of a low-cost, in-plan fixed annuity within the portfolio that gives employees the option to annuitize and create a fixed income stream. 5 Retirement plans should target income as the outcome
7 3. Advice or other financial planning services: Advice can play an important role in workers retirement readiness. It can provide employees with specific recommendations around savings rates, asset allocation, investment options and other retirement planning needs. More important, employees seeking advice tend to take action. More than half of employees (54%) who used an online advice service between February 2012 and January 2013 saved more, changed their future allocations or rebalanced their portfolios. 7 Effective advice offerings should provide actionable recommendations; be unbiased and personalized; and should recognize the importance of lifetime income. Retirement planning should also take into account an individual s complete financial picture, including the rest of the household. Many advice services and offerings designed for DC plans today don t link to other employee assets such as previous employer-sponsored plans, DB plans, outside savings, or spouses savings. An advisor or access to a financial planning service can help workers aggregate their holdings in order to understand their household balance sheet. Likewise, advisors and similar services can help employees convert accumulated assets to lifetime income. For most, the retirement phase is the most unique and complex financial time during a person s life. Often, an advisor can help coordinate an individual s total household assets along with other goals in order to achieve a desired standard of living throughout retirement. Although every employee wants to live comfortably in retirement, there is no one-size-fits-all approach to achieve that goal. Automatic features, professionally structured investment solutions and advice services are all important elements that if used appropriately, can help employees improve their financial well-being. The distribution phase Helping employees generate lifetime income A plan sponsor s role in retirement planning doesn t end once an employee retires. In fact, employees may need more help than previously as they face a daunting task: creating a secure income stream to cover retirement expenses from accumulated savings. As they do so, plan sponsors can help them navigate complex decisions: the risks they re willing to take with their accumulated assets, the rate at which they can withdraw their funds without depleting their savings, the effect of inflation, the impact of health costs, and finally, the risk that they will eventually lose the cognitive capacity to manage their financial affairs. A combination of annuitized income from fixed annuities, Social Security, and pension benefits, if available, can serve as the retirement income floor to cover essential living expenses. By providing education on safe income withdrawal rates, plan sponsors can help retirees address one of their most common fears: outliving their savings. This is a real possibility because many employees do not know enough about sustainable income withdrawal rates. A recent survey found that more than 33% of retirement plan participants had no idea how much they could safely withdraw; an additional 25% said they could withdraw 10% of their assets per year and see their retirement savings persist. 8 As a point of comparison, a 4% withdrawal rate is often used as a rough rule of thumb for how much an individual could withdraw from a retirement portfolio each year without depleting the retirement account. Retirement plans should target income as the outcome 6
8 Exhibit 2: A single-life annuity offers consistent income throughout retirement Annual retirement income W Required minimum distribution W 4% withdrawal W Single-life annuity W Self-annuity $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $ Age This model assumes that a person has annuitized $100,000 at age 65 at a 3% interest rate. For illustration purposes only. Actual payouts may differ. Three percent nominal interest rate return assumption for all calculations. Single Life Annuity (SLA) based on 3% payout rate. Self-annuity payout (in which a person takes the needed amount out of savings rather than annuitizing) set to replicate payout amount of the SLA. Required minimum distribution payout uses Social Security unisex mortality table for remaining life expectancy. All amounts are pretax. Source: Richardson, David P. (2012) The Role of Guaranteed Income in Improving Retirement Security. TIAA-CREF Institute Working Paper. But even with a 4% withdrawal rate, retirees are still exposed to many risks such as investment, longevity and cognitive risks that could render the 4% withdrawal rule irrelevant (see Exhibit 2). In the face of so many risks, many employees need help in obtaining a steady income stream that can last a lifetime, and is not affected by the highs and lows of market performance. Fixed annuities can meet these requirements and are one of the few financial products that can guarantee lifetime income and can only be issued by an insurance company. 9 A combination of annuitized income from fixed annuities, Social Security, and pension benefits, if available, can serve as the retirement income floor to cover essential living expenses. But plan sponsors should communicate to their employees that annuitization from fixed annuities is not an all-or-nothing proposition. Employees can determine whether to fund their retirement solely with guaranteed sources of income or to maintain some flexibility and control over their retirement assets by keeping a portion in other investment products. Benefits of in-plan annuitization with fixed annuities For employees to use fixed annuity options, they must first have access to them. Some institutions offer fixed annuity products within the plan, but if they do not, then employees must find retail fixed annuities on their own when they retire. Both in-plan and out-ofplan fixed annuities are designed to deliver guaranteed lifetime income, but in-plan solutions may offer employees a number of additional benefits. In-plan fixed annuities are offered in a controlled setting, with pre-screening and education from employers. This can help employees understand how fixed annuities work and the impact of saving on future retirement income within the context of their plan: Employees can see, in dollars and cents, how a little more saved during their working years can translate to a higher retirement income. Making this connection makes employees more likely to save more effectively and regularly Retirement plans should target income as the outcome
9 Plan sponsors can generally negotiate lower costs for fixed annuities than individuals using an out-of-plan option. 11 This is important, because lower costs can contribute to higher income payouts. Research shows that individuals who contribute to fixed annuities while they are saving are more likely to annuitize a portion of their savings and receive retirement income in the form of lifetime annuity payments. Without access to an in-plan fixed annuity, employees may not save for retirement through an outside fixed annuity and therefore may be less likely to annuitize their savings upon retiring. 12 Meeting your fiduciary obligations with in-plan fixed annuities When considering an in-plan fixed annuity, plan sponsors often express concerns over the fiduciary obligations associated with selecting a fixed annuity product and provider. The reality is that the principles and processes governing the selection of a fixed annuity product and provider are in many ways similar to those used in the selection of mutual funds and other investment options. And those sponsors that already offer an annuity option at the point of distribution may not realize they may already share the same level of fiduciary obligations as sponsors that offer an in-plan fixed annuity. In general, the standard test for meeting that fiduciary responsibility comes down to following a careful process in the selection and then monitoring of the fixed annuities and any insurance companies whose fixed annuity products are made available to employees. In carrying out its duties, a fiduciary should adhere to the so-called prudent expert standard, which calls on plan sponsors to exercise the care, skill, prudence and diligence that would be employed by a prudent expert acting in a like capacity and familiar with such matters and with the same goals. The principles and processes governing the selection of a fixed annuity product and provider are in many ways similar to those used in the selection of mutual funds and other investment options. This standard therefore calls on plan sponsors to engage in a careful assessment of products and fixed annuity providers, guided by experts when needed and informed by a risk-based review of a provider s ability to honor its guarantee which may include a fixed annuity provider s ratings by insurance ratings services. For those plan sponsors seeking greater assurance that they are meeting their fiduciary obligations to a plan, they can turn to the Department of Labor s safe harbor that became effective in December This safe harbor follows the same basic principles we already mentioned, in addition to requiring plan sponsors to consider the costs versus the available benefits and administrative services of the fixed annuity. To be clear, plan sponsors may choose to follow the safe harbor to meet their fiduciary obligations, but they don t have to. Many of these issues have been tested in the courts, and the relevant rulings provide valuable guideposts for the expectations, as well as the limits of liability, for providers. Retirement plans should target income as the outcome 8
10 Fiduciary checklist Plan sponsors may find it easier to follow an established checklist to help guide the processes of selecting a fixed annuity provider and conducting due diligence. This fiduciary checklist should include a review of a fixed annuity provider s: What matters most to many retirees is not how much they have saved, but how their accumulated savings can translate into a lifetime of income. Strength and stability, which can be assessed through the insurance company s publicly available information; Ratings and financial strength; Track record and reputation as a well-known insurance company in the fixed annuity field; Costs that can reduce financial benefits to the participants through sales charges, commission, surrender fees and other expenses; Transparency to determine whether the information to be reviewed is clear and readily available; and State guarantees, which consider the availability of state guarantee insurance in the states where the plan sponsor is located (and where most plan participants reside) and the extent of guarantee coverage for fixed annuity contracts. This checklist is not intended to define the fiduciary process for selecting a fixed annuity provider but to provide a list of some best practices that will assist fiduciaries in performing their duties. In this light, the checklist should be viewed as a tool that fiduciaries may consider using in helping them fulfill their duties and documenting that they have done so. 13 Leading the way to a secure retirement Employees face a challenging road to retirement, but plan sponsors can help them down this road by focusing on what our research indicates is the right goal for most employees: an income replacement rate that will meet lifetime income needs. With this goal in mind, plan sponsors can design their plans for both the savings and distribution phases, helping employees pave the way to a secure retirement. Automatic features can address the need to save early and save more; professionally structured investment solutions can set the right risk-return strategies; and low-cost investment options can help employees make the most of their savings. However, saving the right amount for retirement may not be enough. Retirees may also need help creating a secure income stream that will last a lifetime. With all the risks facing retirees, the use of guaranteed products can form the building blocks for a secure source of retirement income. By offering fixed annuities, plan sponsors can go beyond today s requirements and set a higher standard of fiduciary responsibility. In the end, what matters most to many retirees is not how much they have saved, but how their accumulated savings can translate into a lifetime of income. Plan sponsors can help them achieve their goals by promoting active savings, smart investing, and wise choices in products that guarantee a lifetime of income. 9 Retirement plans should target income as the outcome
11 1 The findings come from TIAA-CREF s first Lifetime Income Survey, conducted by an independent research firm between January 3 and 5, Polling was among a national random sample of 1,017 adults, age 18 years and older. 2 Employee Benefit Research Institute, 23rd Annual Retirement Confidence Survey, The findings come from TIAA-CREF s first Lifetime Income Survey, conducted by an independent research firm between January 3 and 5, Polling was among a national random sample of 1,017 adults, age 18 years and older. Income from an annuity is based on the claims-paying ability and strength of the issuing company. 4 Marlena Lee, The Retirement Income Equation, DC Dimensions (Summer 2012). See Methodology Supporting Savings Rates and Replacement Rates in the disclosures. 5 Marlena Lee, The Retirement Income Equation, DC Dimensions (Summer 2012) 6 Employee Benefit Research Institute, Issue Brief No. 341, April Based on 2013 TIAA-CREF proprietary research of 17,741 TIAA-CREF participants who used TIAA-CREF Retirement Advisor (online advice) from February 2012 through January 2013 and took action within the same time period. 8 DrinkerBiddle, Lifetime Income in Defined Contribution Plans: A Fiduciary Approach. 9 Source: American Council of Life Insurers (ACLI). Guarantees based on the financial strength of the issuing company. 10 Paul J. Yakoboski, Retirees, Annuitization and Defined Contribution Plans, Trends and Issues, TIAA-CREF Institute, April TIAA-CREF, Investing for a Lifetime. Guaranteed. 12 Paul J. Yakoboski, Retirees, Annuitization and Defined Contribution Plans, Trends and Issues, TIAA-CREF Institute, April DrinkerBiddle, Lifetime Income in Defined Contribution Plans: A Fiduciary Approach. Dimensional Fund Advisors LP ( Dimensional ) is an investment advisor registered with the U.S. Securities and Exchange Commission. Dimensional does not issue or distribute annuities or insurance products or provide legal or tax advice. The information herein is for informational purposes only and is not intended to provide legal advice. Please seek advice from appropriate counsel before taking any action. Retirement plans should target income as the outcome 10
12 This material is solely for informational purposes and shall not constitute an offer to sell or the solicitation to buy securities or investment services. The opinions expressed herein represent the current, good faith views of [Dimensional] at the time of publication and are provided for limited purposes, are not definitive investment advice, and should not be relied on as such. The information presented in this article has been developed internally and/or obtained from sources believed to be reliable; however, [Dimensional] does not guarantee the accuracy, adequacy or completeness of such information. Predictions, opinions, and other information contained in this article are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Any forward-looking statements speak only as of the date they are made, and [Dimensional] assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results could differ materially from those anticipated in forward-looking statements. This material is directed exclusively at investment professionals. Any investments to which this material relates are available only to or will be engaged in only with investment professionals. The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons. Past performance does not guarantee future results. TIAA-CREF products may be subject to market and other risk factors. See the applicable product literature, or visit tiaa-cref.org for details. Annuity account options are available through contracts issued by TIAA or CREF. These contracts are designed for retirement or other long-term goals, and offer a variety of income options, including lifetime income. Payments from the variable annuity accounts [and mutual funds] are not guaranteed and will rise or fall based on investment performance. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, New York, NY Methodology Supporting Savings Rates and Replacement Rates Dimensional simulated income and portfolio paths of 10,000 households. The working years are age 25 to 65, and full retirement occurs at age 66. Final pre-retirement income matches the actual income distribution of households age 60 to 64 in i Pay raises and portfolio outcomes are jointly drawn from historical distributions of changes in real per-capita income and real stock and bond returns over the period from ii Each year, the households save a fixed fraction of their gross income in a Roth retirement vehicle. The portfolio is invested in stocks and bonds, with the percent invested in stocks equaling 100% age. We assume households with below (above) median final income want to replace 100% (90%) of preretirement spending, where pre-retirement spending equals gross income less savings, federal income taxes, and FICA taxes estimated using current tax laws and standard deductions. A household s spending is partially funded by Social Security, but any shortfall is financed using personal savings. The table below shows the savings rates needed to achieve this spending level (or more) with 75 90% probability, assuming the price of a $1 real annuity is $20. Even with a Social Security replacement rate of 59% for the lowest income quartile, savings must be about 10% to maintain at least the same level of pre-retirement spending in about 85% of the simulations. For households with annual income exceeding $25,870, a savings rate in the low teens is required to maintain spending levels with high probability. Percentage of pre-retirement income < $25th 25th 50th 50th 75th > 75th Pre-retirement income range < $25,870 < $49,941 < $86,882 more than $86,882 Median effective tax rate 8% 14% 18% 21% Savings rate 9% 11% 13% 15% 12% 14% 13% 16% Spending adjustment 0% 0% 10% 10% Replacement Rate Total 81 83% 71 73% 61 63% 57 59% Social Security 59% 38% 31% 21% Notes i. Source: US Census Bureau Current Population Survey. Annual Social and Economic Supplement. ii. Real changes in per-capita income obtained from Bureau of Economic Analysis. National Income and Product Accounts tables. The assumption that the household does not defer taxes allows me to complete the analysis without having to make predictions about future tax rates. The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Results may vary with each use and over time. These hypothetical returns are used for discussion purposes only and are not intended to represent, and should not be construed to represent, predictions of future rates of return. Circumstances can cause substantial deviation from the estimates. This could result in declines in an account s value over short or even extended periods of time. Results may vary with each use and over time. C _ A14401 (06/14)
Paving the way to a secure retirement: A model DC approach
Paving the way to a secure retirement: A model DC approach Life expectancy (age) 95 90 85 49% 73% 0 20 40 60 80 100% Probability at age 65 A couple at age 65 has an 89 percent chance of one of them living
More informationJanuary 2014. Helping participants generate a lifetime of income
January 2014 Helping participants generate a lifetime of income At the beginning of the 1980s, defined benefit plans were the dominant retirement approach in the U.S. 30 million Americans were covered
More informationThinking Past Savings: Research from TIAA-CREF Reinforces the Need to Focus Clients on Reliable Retirement Income
VOLUME 5, N U M B E R 1 Fundamental Planning Strategies Thinking Past Savings: Research from TIAA-CREF Reinforces the Need to Focus Clients on Reliable Retirement Income BY ED VAN DOLSEN ED VAN DOLSEN
More informationThe Retirement Income Equation
The Retirement Income Equation Understanding how to arrive at a target replacement rate By Marlena I. Lee, PhD Vice President Dimensional Fund Advisors June 2013 THE RETIREMENT INCOME EQUATION 1 INTRODUCTION
More informationHow Much Should I Save for Retirement? By Massi De Santis, PhD and Marlena Lee, PhD Research
How Much Should I Save for Retirement? By Massi De Santis, PhD and Marlena Lee, PhD Research June 2013 Massi De Santis, a senior research associate at Dimensional, is a financial economist with more than
More informationA guide to your retirement income options with TIAA-CREF
A guide to your retirement income options with TIAA-CREF Helping you make important decisions about your retirement How will I know when the time is right to retire? Making the decision to retire is no
More informationPlanning For Retirement:
June 2013 Planning For Retirement: THE IMPACT OF INTEREST RATES on retirement income The National Retirement Risk Index (NRRI) is published by the Center for Retirement Research (CRR) at Boston College,
More informationBest practices for confident plan compliance
Best practices for confident plan compliance Ongoing efforts to expand retirement plan participation, promote transparency and enhance benefit security have increased responsibilities for plan sponsors.
More informationMoney At Work 1: Foundations of investing
It s not about how much money you earn. It s about how much you save and invest. November 12, 2015 A TIAA-CREF Financial Essentials Workshop Bill Thorne TIAA-CREF Money At Work 1: Foundations of investing
More informationHow to make changes to your annuity income
How to make changes to your annuity income What s inside 2 Your annuity income 4 TIAA Traditional annuity income 6 TIAA and CREF variable annuity income 9 Ways to adjust your annuity income 9 Transfer
More informationCreating future lifetime income with Deferred Income Annuities
Creating future lifetime income with Deferred Income Annuities Fixed annuities available at Fidelity are issued by third-party insurance companies, which are not affiliated with any Fidelity Investments
More informationWelcome! Thanks for investing your time today.
Welcome! Thanks for investing your time today. Please sign in Fill out your name tag Address your mail card It s not about how much money you earn. It s about how much you save and invest. October 2015
More informationUnderstanding Annuities
Annuities, 06 5/4/05 12:43 PM Page 1 Important Information about Variable Annuities Variable annuities are offered by prospectus, which you can obtain from your financial professional or the insurance
More informationThe Individual Annuity
The Individual Annuity a resource in your retirement an age of Decision Retirement today requires more planning than for previous generations. Americans are living longer many will live 20 to 30 years
More informationYour Retirement Income Options. TIAA-CREF Financial Essentials
Your Retirement Income Options TIAA-CREF Financial Essentials Today we will discuss: 1. Determining your retirement income needs Income sources Covering your expenses 2. Threats to your retirement cash
More informationInnovative, flexible, low-cost retirement solution
TIAA-CREF Life Insurance Company Innovative, flexible, low-cost retirement solution The Intelligent Variable Annuity How do you define retirement? Some people dream of traveling. Others can t wait to roll
More informationSOCIAL SECURITY WON T BE ENOUGH:
SOCIAL SECURITY WON T BE ENOUGH: 6 REASONS TO CONSIDER AN INCOME ANNUITY How long before you retire? For some of us it s 20 to 30 years away, and for others it s closer to 5 or 0 years. The key here is
More informationThe Voya Retire Ready Index TM
The Voya Retire Ready Index TM Measuring the retirement readiness of Americans Table of contents Introduction...2 Methodology and framework... 3 Index factors... 4 Index results...6 Key findings... 7 Role
More informationBuilding Successful, State Sponsored Retirement Programs for Private Sector Employees
Building Successful, State Sponsored Retirement Programs for Private Sector Employees April 25, 2016 2.25 x 0.875 Confronting a retirement readiness gap 55 million Americans do not have access to a pension
More informationINVESTMENT AND PLANNING SOLUTIONS. Redefine your means in retirement. Member FINRA/SIPC
INVESTMENT AND PLANNING SOLUTIONS Redefine your means in retirement Member FINRA/SIPC INVESTMENT AND PLANNING SOLUTIONS More guaranteed income to count on when you need it to count. It s taking that second
More informationDimensional Managed DC
Pensions, benefits and social security colloquium 2011 Jan Snippe Dimensional Managed DC A Next-Generation Retirement Solution 26 September 2011 2010 The Actuarial Profession www.actuaries.org.uk Agenda
More informationThe individual. A Resource for Your Retirement
Retirement today requires more planning than for previous generations. Americans are living longer many will live 20 to 30 years or more in retirement. Finding a way to make savings last over such a long
More informationStrategies for staying on track. throughout your retirement
Strategies for staying on track throughout your retirement TIAA-CREF and you: Planning an income for life For nearly a century, we at TIAA-CREF have dedicated ourselves to helping those who serve others
More informationYour model to successful individual retirement investment plans
Your model to successful individual retirement investment plans Tim Noonan Managing Director, Capital Markets Insights Russell Investments WWW.RISYMPOSIUM.COM Presented by: Important Information Please
More informationThe Individual Annuity
The Individual Annuity a re s o u rc e i n yo u r r e t i r e m e n t an age of Decision Retirement today requires more planning than for previous generations. Americans are living longer many will live
More informationTarget-date funds: the to versus through dilemma
November 14 Target-date funds: the to versus through dilemma Leo M. Zerilli, CIMA Head of Investments John Hancock Investments Recent U.S. Department of Labor guidance on target-date funds provides helpful
More informationThe Four Pillars and Public Policy Prudential s positions on legislative and regulatory issues impacting retirement security in America
Prudential Financial The Four Pillars and Public Policy Prudential s positions on legislative and regulatory issues impacting retirement security in America Public policy affects many aspects of our everyday
More informationDecember 2014. Tax-Efficient Investing Through Asset Location. John Wyckoff, CPA/PFS, CFP
John Wyckoff, CPA/PFS, CFP Your investment priorities are likely to evolve over time, but one goal will remain constant: to maximize your investment returns. Not all returns are created equal, however.
More informationadvisory & Brokerage consulting services Make Your Retirement Savings Last a Lifetime
advisory & Brokerage consulting services Make Your Retirement Savings Last a Lifetime Member FINRA/SIPC ADVISORY & Brokerage consulting SERVICES Three Things to Consider When Planning for Retirement Today,
More informationRetirement sustainability for defined contribution plan participants
By: Daniel Gardner, Defined Contribution Analyst MAY 2011 Sam Pittman, Senior Research Analyst Retirement sustainability for defined contribution plan participants Defined benefit pensions have largely
More informationAugust 26, 2015. Re: Important information about your retirement plan
MANHATTANVILLE COLLEGE 2900 PURCHASE STREET PURCHASE, NY 105772131 August 26, 2015 SECTION1 Re: Important information about your retirement plan The enclosed information is being provided to help you make
More informationLifetime Income Solutions for DC Participants
Lifetime Income Solutions for DC Participants Federal Regulators Offer New, Practical Guidance for Plan Sponsors 80% of participants responded that a guaranteed monthly payout benefit is a must have in
More informationRetirement Income Products:
Retirement Income Products: Which One Is Right for Your Plan? Volume 4, Number 1 Introduction As 401(k) plans have evolved from a supplemental retirement or capital accumulation plan to the sole retirement
More informationA Guide to. Planning for Retirement INVESTMENT BASICS SERIES
A Guide to Planning for Retirement INVESTMENT BASICS SERIES It s Never Too Early to Start What You Need to Know About Saving for Retirement Most of us don t realize how much time we may spend in retirement.
More informationCreating lifetime income with Immediate Fixed Income Annuities
Creating lifetime income with Immediate Fixed Income Annuities Fixed annuities available at Fidelity are issued by third-party insurance companies, which are not affiliated with any Fidelity Investments
More informationSAVING FOR RETIREMENT. The ROTH
SAVING FOR RETIREMENT The ROTH CONTRIBUTION Option ABOUT TIAA-CREF TIAA-CREF is dedicated to serving the retirement needs of those in the academic, medical, cultural and research fields. We are committed
More informationTHE CASE FOR GUARANTEED ANNUITIES IN DEFINED CONTRIBUTION PLANS
OCTOBER 2010 THE CASE FOR GUARANTEED ANNUITIES IN DEFINED CONTRIBUTION PLANS HELPING PLAN FIDUCIARIES CLOSE THE RETIREMENT INCOME GAP Executive Summary Millions of Americans rely on defined contribution
More informationTax-smart ways to save and invest. TIAA-CREF Financial Essentials
Tax-smart ways to save and invest TIAA-CREF Financial Essentials Today s agenda: 1. Finding funds for saving 2. Tax law provisions promoting saving 3. TIAA-CREF savings opportunities 4. TIAA-CREF can help
More informationThe Roth contribution option
The Roth contribution option For retirement plans Contents The Roth contribution option savings choice 2 Learn about the differences between pretax and after-tax contributions Comparing Roth after-tax
More informationUnderstanding fixed index annuities
Allianz Life Insurance Company of North America Understanding fixed index annuities M-5217 Page 1 of 12 Page 2 of 12 It s time to rethink retirement. In past years, the financial markets have experienced
More informationUnderstanding Annuities: A Lesson in Variable Annuities
Understanding Annuities: A Lesson in Variable Annuities Did you know that an annuity can be used to systematically accumulate money for retirement purposes, as well as to guarantee a retirement income
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 informationROTH 403(b) CONTRIBUTIONS
SAVING FOR RETIREMENT ROTH 403(b) CONTRIBUTIONS A NEW WAY TO SAVE FOR RETIREMENT TIAA-CREF: FINANCIAL SERVICES FOR THE GREATER GOOD TIAA-CREF is dedicated to serving the retirement needs of those in the
More informationA Guide to Planning for Retirement INVESTMENT BASICS SERIES
A Guide to Planning for Retirement INVESTMENT BASICS SERIES It s Never Too Early to Start What You Need to Know About Saving for Retirement Most of us don t realize how much time we may spend in retirement.
More informationretirement income solutions *Advisor Design guide for Life s brighter under the sun What s inside Retirement income solutions advisor guide USE ONLY
Retirement income solutions advisor guide *Advisor USE ONLY Design guide for retirement income solutions What s inside Discussing retirement needs with clients Retirement income product comparison Creating
More informationTransition risk: Rethinking investing for retirement By Tim Friederich, David Karim and Dr. Wolfgang Mader
Allianz Global Investors white paper series Transition risk: Rethinking investing for retirement By Tim Friederich, David Karim and Dr. Wolfgang Mader Executive summary Are millions of Americans, retirement-plan
More informationTRANSFER PAYOUT ANNUITIES
SAVING FOR RETIREMENT TRANSFER PAYOUT ANNUITIES TRANSFERS AND WITHDRAWALS FROM TIAA TRADITIONAL TIAA-CREF: FINANCIAL SERVICES FOR THE GREATER GOOD TIAA-CREF is dedicated to serving the retirement needs
More informationJuly 28, 2015. Re: Important information about your retirement plan
JOHN CARROLL UNIVERSITY One John Carroll Blvd. UNIVERSITY HEIGHTS, OH 441184520 July 28, 2015 SECTION1 Re: Important information about your retirement plan The enclosed information is being provided to
More informationGiven a constantly changing tax environment, what s the most effective way to save for retirement?
Retirement Savings Tax Planning Tips Given a constantly changing tax environment, what s the most effective way to save for retirement? In the next few years, Congress will decide the fate of several tax
More informationMEMBERS Future Income Annuity
MEMBERS Future Income Annuity GUARANTEED INCOME FOR LIFE Move confidently into the future MFA-875346-034-046 A financial services company serving financial institutions and their clients worldwide. It
More informationResource Guide. Creating a plan for lifetime income in retirement
Resource Guide Creating a plan for lifetime income in retirement Freedom in retirement starts with income in retirement When it comes to planning for your future, nothing should be left to chance. That
More informationUnderstanding Annuities: A Lesson in Annuities
Understanding Annuities: A Lesson in Annuities Did you know that an annuity can be used to systematically accumulate money for retirement purposes, as well as to guarantee a retirement income that you
More informationREADING 14: LIFETIME FINANCIAL ADVICE: HUMAN CAPITAL, ASSET ALLOCATION, AND INSURANCE
READING 14: LIFETIME FINANCIAL ADVICE: HUMAN CAPITAL, ASSET ALLOCATION, AND INSURANCE Introduction (optional) The education and skills that we build over this first stage of our lives not only determine
More informationGet help achieving your financial goals.
Get help achieving your financial goals. TIAA-CREF: Committed to your overall financial well-being Did you know? TIAA was founded in 1918 to provide retirement security to university faculty. TIAA-CREF
More informationThe growing demand for retirement income solutions: Options for the plan sponsor
Institutional Retirement and Trust The growing demand for retirement income solutions: Options for the plan sponsor The need for retirement income solutions has become more evident each year. Today, fewer
More informationNo bank guarantee Not a deposit May lose value Not FDIC/NCUA insured Not insured by any federal government agency
Understanding annuities An Overview for Your Retirement No bank guarantee Not a deposit May lose value Not FDIC/NCUA insured Not insured by any federal government agency 2/15 13096-15A Contents Get Ready
More informationSYSTEMATIC WITHDRAWALS AND TRANSFERS FROM TIAA TRADITIONAL
SYSTEMATIC WITHDRAWALS AND TRANSFERS FROM TIAA TRADITIONAL THE TIAA TRADITIONAL ANNUITY The TIAA Traditional Annuity is a guaranteed annuity backed by TIAA s claims-paying ability. In the accumulation
More informationMinimum distribution. Making it simple
Minimum distribution Making it simple Required minimum distributions What you need to know What are required minimum distributions?... 03 TIAA-CREF s Minimum Distribution Option (MDO)... 04 Is the Minimum
More informationLIVING WELL IN RETIREMENT. Minimum Distribution: Making it simple
LIVING WELL IN RETIREMENT Minimum Distribution: Making it simple TIAA-CREF: FINANCIAL SERVICES FOR THE GREATER GOOD. TIAA-CREF is dedicated to serving the retirement needs of those in the academic, medical,
More informationability to accumulate retirement resources while increasing their retirement needs; and
Consulting Retirement Consulting Talent & Rewards The Real Deal 2012 Retirement Income Adequacy at Large Companies RETIREMENT YOU ARE HERE About This Report This study assesses whether employees of large
More information_ Retirement. Planning for the Stages of. Getting started Your 20s and early 30s
Planning for the Stages of _ Retirement _ Retirement is being reinvented. It s no longer our parent s retirement. Social Security alone w o n t see us through retirement, especially for higher income earners.
More informationUnderstanding annuities
ab Wealth Management Americas Understanding annuities Rethinking the role they play in retirement income planning Protecting your retirement income security from life s uncertainties. The retirement landscape
More informationHow to make changes to your annuity income
How to make changes to your annuity income What s inside 2 Is it time to make a change? 3 Your annuity income 5 TIAA Traditional income 7 TIAA and CREF variable income 10 Ways to adjust your annuity income
More informationPersonal Financial Plan. John & Mary Sample
For Prepared by Donald F. Dempsey Jr. PO Box 1591 Williston, VT 05495 802-764-5815 This presentation provides a general overview of some aspects of your personal financial position. It is designed to provide
More informationThe TIAA-CREF Advisor Network
The TIAA-CREF Advisor Network Expanding Employee Advice Services Through Independent RIA s Robert Rickey, CFP, AIF December 18, 2013 Full Spectrum of Advice Services TIAA-CREF recognizes how important
More informationSAMPLE OF INVESTMENT POLICY STATEMENT
investment services SAMPLE OF INVESTMENT POLICY STATEMENT FOR THE (PLAN NAME) OUR HISTORY We are TIAA-CREF. We re a full-service financial services organization that has dedicated itself to helping those
More informationTRENDS AND ISSUES APRIL 2010
TRENDS AND ISSUES APRIL 2010 Retirees, Annuitization and Defined Contribution Plans Paul J. Yakoboski Principal Research Fellow TIAA-CREF Institute Executive Summary The main objective for any primary
More informationPlanning for the Stages of Retirement
Planning for the Stages of Retirement The Financial Planning Association (FPA ) connects those who need, support and deliver financial planning. We believe that everyone is entitled to objective advice
More informationCHOOSING YOUR INVESTMENTS
CHOOSING YOUR INVESTMENTS FOR ASSISTANCE GO ONLINE For more information on your retirement plan, investment education, retirement planning tools and more, please go to www.tiaa-cref.org/carnegiemellon.
More informationBuilding Your Retirement Portfolio
Building Your Retirement Portfolio With the Help of TIAA-CREF 111075_L01.indd 1 ABOUT TIAA-CREF: For more than 90 years, we at TIAA-CREF have dedicated ourselves to helping those who serve the greater
More informationINVEST EASILY FOR YOUR DAY ONE OF RETIREMENT AND BEYOND SUCCEED. Prudential SmartSolution IRA Investment Guide
SUCCEED SUNRISE PHOTOS TAKEN BY REAL PEOPLE OF THEIR ACTUAL DAY ONES OF RETIREMENT. WHAT WILL YOURS LOOK LIKE? INVEST EASILY FOR YOUR DAY ONE OF RETIREMENT AND BEYOND Prudential SmartSolution IRA Investment
More informationTREASURY FACT SHEET: HELPING AMERICAN FAMILIES ACHIEVE RETIREMENT SECURITY BY EXPANDING LIFETIME INCOME CHOICES
TREASURY FACT SHEET: HELPING AMERICAN FAMILIES ACHIEVE RETIREMENT SECURITY BY EXPANDING LIFETIME INCOME CHOICES In September 2009, President Obama announced several new steps to make it easier for American
More informationEstimating the True Cost of Retirement
Estimating the True Cost of Retirement David Blanchett, CFA, CFP Head of Retirement Research Morningstar Investment Management 2013 Morningstar. All Rights Reserved. These materials are for information
More informationSaving for retirement with a 403(b) plan
Saving for retirement with a 403(b) plan 2 Saving for retirement with a 403(b) plan Saving for retirement with a 403(b) plan Retirement can be a welcome turning point in your life a time to enjoy hobbies,
More informationREVIEWING YOUR TIAA-CREF INCOME CHOICES A GUIDE TO YOUR PAYMENT OPTIONS
REVIEWING YOUR TIAA-CREF INCOME CHOICES A GUIDE TO YOUR PAYMENT OPTIONS FLEXIBILITY & CHOICE TIAA-CREF UNDERSTANDS YOUR FINANCIAL PRIORITIES can change over time, which is why we offer you a wide range
More informationUnderstanding Annuities: A Lesson in Fixed Interest and Indexed Annuities Prepared for: Your Clients
Understanding Annuities: A Lesson in Fixed Interest and Indexed Annuities Prepared for: Your Clients Presented by: Arvin D. Pfefer Arvin D. Pfefer & Associates 7301 Mission Road, Suite 241 Prairie Village,
More informationRetirement Planning EMPLOYER PLANS CALCULATING YOUR NEEDS INVESTMENTS DECISIONS
GOALS What You Should Know About... Retirement Planning EMPLOYER PLANS CALCULATING YOUR NEEDS INVESTMENTS DECISIONS YourMoneyCounts No matter who you are or how much money you have, you re probably hoping
More informationDepartment of Labor Room N-5655 Employee Benefits Security Administration 200 Constitution Avenue, NW Washington, D.C. 20210
Larry M. Chadwick Vice President, Government Relations Public Policy Tel: 434-964-2611 Cell: 434-249-6635 Fax: 434-964-2602 lchadwick@tiaa-cref.org April 30, 2010 Delivered via E-mail to e-ori@dol.gov
More informationLife Insurance Review Using Legacy Advantage SUL Insurance Policy
Using Legacy Advantage SUL Insurance Policy Supplemental Illustration Prepared by: MetLife Agent 200 Park Ave. New York, NY 10166 Insurance Products: Not A Deposit Not FDIC-Insured Not Insured By Any Federal
More informationINCOME PLANNING FOR YOUR LIFETIME. THE FACTS ON ANNUITIES
{ INCOME PLANNING FOR YOUR LIFETIME. } THE FACTS ON ANNUITIES ANNUITIES: INCOME PLANNING FOR YOUR LIFETIME Whether you are dreaming of golfing in Arizona or traveling around the world, a financially comfortable
More informationSTATEMENT FOR THE RECORD FROM THE AMERICAN COUNCIL OF LIFE INSURERS BEFORE THE 2012 ERISA ADVISORY COUNCIL
STATEMENT FOR THE RECORD FROM THE AMERICAN COUNCIL OF LIFE INSURERS BEFORE THE 2012 ERISA ADVISORY COUNCIL EXAMINING INCOME REPLACEMENT DURING RETIREMENT IN A DEFINED CONTRIBUTION PLAN SYSTEM WEDNESDAY
More informationManaging Retirement Security with an Income Advantage
Managing Retirement Security with an Income Advantage The VantageTrust Retirement IncomeAdvantage Fund 0186480-00001-00 How can you make sure that you have the tools necessary to achieve your desired standard
More informationAon Consulting s 2008 Replacement Ratio Study. A Measurement Tool For Retirement Planning
Aon Consulting s 2008 Replacement Ratio Study A Measurement Tool For Retirement Planning A Measurement Tool for Retirement Planning For twenty years, Aon Consulting and Georgia State University have published
More informationThe Basics of Annuities: Planning for Income Needs
March 2013 The Basics of Annuities: Planning for Income Needs summary the facts of retirement Earning income once your paychecks stop that is, after your retirement requires preparing for what s to come
More information10 MISTAKES PEOPLE MAKE IN RETIREMENT
10 MISTAKES PEOPLE MAKE IN RETIREMENT by Bill Elson, CFP 3705 Grand Avenue Des Moines, IA 50312 (515) 255-3306 or (800) 616-4392 belson@vsrfin.com KEYWORDS: RETIREMENT PLANNING, RETIREMENT INCOME, RETIREMENT
More informationYour Fiscal Fitness Review. Financial wellness tips, tools and checklists from TIAA-CREF especially for State University of New York employees
Your Fiscal Fitness Review Financial wellness tips, tools and checklists from TIAA-CREF especially for State University of New York employees Keeping fiscally fit is now more important and easier than
More informationBuilding an Effective Retirement Portfolio with Whole Life Insurance Guarding Your Retirement Style
Building an Effective Retirement Portfolio with Whole Life Insurance Guarding Your Retirement Style A CONSUMER GUIDE The Boomer Generation an Introduction to a Different Decade When do you plan to retire?
More informationRetirement Income Investment Strategy by Andrew J. Krosnowski
Retirement Income Investment Strategy by Andrew J. Krosnowski Step 1- Income Needs-When formulating a successful strategy to generate income during retirement we feel that it is important to start by identifying
More informationThe Basics of Annuities: Income Beyond the Paycheck
The Basics of Annuities: PLANNING FOR INCOME NEEDS TABLE OF CONTENTS Income Beyond the Paycheck...1 The Facts of Retirement...2 What Is an Annuity?...2 What Type of Annuity Is Right for Me?...2 Payment
More informationBe prepared for whatever comes your way.
Fixed Annuities Your 5-minute Guide Be prepared for whatever comes your way. Prepare for the unexpected When it comes to the retirement you ve worked so hard for, you might not be willing to accept the
More informationUnderstanding annuities
Wealth Management Americas Understanding annuities Rethinking the role they play in retirement income planning Helping to protect your retirement income security from life s uncertainties. The retirement
More informationTransfer Payout Annuities
Transfer Payout Annuities Transfers and Withdrawals from TIAA Traditional tiaa-cref.org The TIAA Traditional Annuity In this guide, you ll learn about our Transfer Payout Annuity (TPA), a transfer and
More informationCONSUMER S GUIDE TO. Annuities. Be secure and confident in the decisions you make
A CONSUMER S GUIDE TO Annuities Be secure and confident in the decisions you make Americans are living longer than ever before. How will they fund these extra years? There are many different approaches.
More informationHow To Determine Reasonableness Of A 401(A) Plan Fee
January 2012 Assessing reasonableness of 403(b) retirement plan fees: Best practices for defining Who, What, How and Why Making sense of retirement plan fees and determining if they are reasonable will
More informationConsiderations for Plan Sponsors: CUSTOM TARGET DATE STRATEGIES
PRICE PERSPECTIVE April 2015 Considerations for Plan Sponsors: CUSTOM TARGET DATE STRATEGIES In-depth analysis and insights to inform your decision making. EXECUTIVE SUMMARY Defined contribution plan sponsors
More informationAn Institutional IRA
An Institutional IRA SVP Thomas Johnson, Jr. New York Life Insurance Company May 13, 2010 The Company You Keep Components of an Institutional IRA (IIRA) What are the critical components of an Institutional
More informationGenerate More Efficient Income and a Stronger Portfolio
Generate More Efficient Income and a Stronger Portfolio All examples shown are hypothetical and for illustrative purposes only and do not represent the performance of an actual investment. Past performance
More informationInvestment Policy Questionnaire
Investment Policy Questionnaire Name: Date: Ferguson Investment Services, PLLC Investment Policy Questionnaire Introduction: The information you provide on this questionnaire will remain confidential.
More informationCHOOSING YOUR INVESTMENTS
CHOOSING YOUR INVESTMENTS FOR ASSISTANCE CONTACT US TODAY FOR MORE INFORMATION, ADVICE OR HELP OPENING AN ACCOUNT, IT S EASY TO REACH US: BY PHONE Call us at 800 TIAA-CREF (800 842-2273) to speak with
More informationThe easy way to save for your retirement
The easy way to save for your retirement If you want to live comfortably during your retirement, you really can t afford to wait to begin saving for that goal. And now that your employer is offering the
More information