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Retirement Income Planning

Retirement Income Planning. 10 Questions to Ask Before You Retire.

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Retirement Income Planning

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  1. Retirement Income Planning 10 Questions to Ask Before You Retire

  2. SunAmerica may be a sponsor of this seminar. As a sponsor, it would have contributed a fee or services to help defer seminar costs. During the course of this seminar, your financial advisor may recommend variable annuity products that are issued by SunAmerica. Neither SunAmerica nor its representatives may provide individual investment recommendations or advice. SunAmerica and the Broker Dealer that employs your financial advisor may or may not be affiliated. Please see your financial advisor for details.

  3. What do I want to do in retirement? 1 PLANNING TIP: Take the time now to think about how you want to spend your retirement.

  4. When do I want to retire? 2 Your time horizon is an important factor in determining what investments or strategies can be used to help achieve your retirement goals PLANNING TIP: Choose short-, intermediate- or long-term investments to match your income needs

  5. How much will I need? 3 PLANNING TIP: Use 70-80% of your current salary to estimate your annual income needs in retirement. One study estimates that the average retiree will need 15.7 times their final pay in total retirement resources* Assuming a paycheck of $100,000, they’ll need $1.57 million in retirement savings! *Source: Hewitt Associates, May 3, 2010

  6. When will I need the most income? 4 Average Annual Expenditures by Age Overall retirement spending is highest early in retirement and declines with age! Source: U.S. Department of Labor, Bureau of Labor Statistics, Consumer Expenditure Survey, October 2010. PLANNING TIP: Focus on investments that can help you generate more income in the early years of retirement

  7. How long will my income last? 5 If you and your spouse are now age 65, there’s a: • 50% chance that one of you will live to age 92 • 25% chance that one of you will live to age 97 Source: Society of Actuaries, Annuity 2000 Mortality Table PLANNING TIP: To help ensure you won’t outlive your income, plan on a retirement lasting 30 years or more

  8. Do I have an income gap? 6 PLANNING TIP: Obtain Social Security estimates by using the Benefit Calculator on the Social Security website (www.ssa.gov/estimator) Here’s how you can find out: • Estimate your retirement expenses • Calculate the income you expect from guaranteed sources like Social Security • Determine if you’re facing an income gap

  9. How can I lessen the impact of a down market on my income? 7 Stock Market Declines Since 1900 Source: Dow Jones Industrial Average, daily closes, 1/2/1900-12/31/2011 PLANNING TIP: Use investments or strategies with “an income safety net”

  10. Will my income keep up with inflation and taxes? 8 Real rates of return, 1926-2011 Bonds and cash are unlikely to offer the growth potential necessary to achieve your retirement goals! PLANNING TIP: Capitalize on tax-advantaged products that can help you generate rising income in any market Source: Ibbotson Associates, 2011. Stocks are represented by the S&P 500 Index; bonds by 20-Year U.S. Government Bonds; cash by 30-day U.S. Treasury Bills; and inflation by the Consumer Price Index. Stocks are often subject to significant price fluctuations and therefore an investor may have a gain or loss in principal when shares are sold. Government bonds and Treasury Bills are subject to interest rate risk but are backed by the full faith and credit of the U.S. government if held to maturity. The data assumes reinvestment of income and does not account for transaction costs. Federal income tax is calculated using the historical marginal and capital gains tax rates for a single taxpayer earning $100,000. No state income taxes are included.

  11. When should I start taking Social Security payments? 9 Source: Social Security Administration PLANNING TIP: Waiting can help maximize your retirement income Taking benefits early at age 62 may reduce your initial payment by as much as 30% Deferring payments until after your Full Retirement Age (ages 65-67) can increase your benefits by up to 8% per year

  12. How can I guarantee more income for life? 10 Sources of Retirement Income Source: Income of the Aged Chartbook, Social Security Administration, April 2010 PLANNING TIP: Consider supplementing your guaranteed income with investments like variable annuities

  13. Creating your Personal Income Plan • CDs/Treasuries • Bonds • Dividend-paying stocks • Fixed annuities • Immediate annuities • Variable annuities • Mutual funds • Systematic withdrawals • Income buckets • Delaying Social Security • Post-retirement job There are many income investments and strategies to consider:

  14. We’ve highlighted a few of these investments here…

  15. Bonds Income Benefits Predictable income Opportunity for fixed rate of return Potential income protection Potential tax advantages Potential Disadvantages Low current yields Income sensitive to interest rate changes, as well as credit, default and other risks Income may not keep up with inflation and taxes

  16. Dividend-Paying Stocks Income Benefits Dividend income Growth potential Qualified dividends may be taxed at a lower rate Potential Disadvantages Income and principal sensitive to market risk Dividend income may be reduced or eliminated in tough economic times

  17. Mutual Funds Income Benefits • Broad diversification • Professional management • Potentially better cash flow • Opportunity for more income and growth potential Potential Disadvantages • Same risks as those of the underlying assets • Unlike individual bonds, bond funds don’t have a fixed yield or a contractual obligation to repay principal

  18. Variable Annuitieswith an optional income benefit Income Benefits Tax deferral Income flexibility Guaranteed lifetime income through annuitization or optional benefits Some optional benefits guarantee rising income for a certain number of years Potential Disadvantages Income may be guaranteed, but principal continues to fluctuate with the market Potentially higher fees and charges Withdrawal charges Possible loss of investment control and access upon annuitization

  19. Systematic Withdrawals Income Benefits • Make withdrawals based on strategy, not emotion • Generate income that has the potential to outpace inflation • Provide a level of income that can help maintain your retirement lifestyle Potential Disadvantages • Fluctuating income • You may need to take less income to help ensure your assets are not depleted

  20. Which income investments or strategies are best for you? We’ll work together to come up with an income plan that’s personalized for you.

  21. You can obtain a prospectus for the variable annuity you may be considering from the seminar speaker or by calling 1-800-445-7862. The prospectus contains the objectives, risks, fees, charges, expenses and other information regarding the contract and underlying funds, which should be considered carefully before investing. Please read the prospectus carefully before investing. Variable annuities are designed for long-term retirement investing. Withdrawals of taxable amounts are subject to ordinary income tax and, if taken prior to age 59½, a 10% federal tax penalty may apply. Early withdrawals may be subject to withdrawal charges. Partial withdrawals may also reduce benefits available under the contract as well as the amount available upon a full surrender. An investment in a variable annuity involves investment risk, including the possible loss of principal. The contract, when redeemed, may be worth more or less than the total amount invested. Guarantees that help protect against market downturns are optional, subject to conditions, limitations and an additional fee. All contract and optional benefit guarantees are backed by the claims-paying ability of the issuing insurer. This material was prepared to support the marketing of the SunAmerica Variable Annuities. Please keep in mind that neither SunAmerica, nor its distributors and representatives, may give tax, accounting or legal advice. Any tax statements in this material are not intended to suggest the avoidance of U.S. federal, state or local tax penalties. Please seek the advice of an independent tax advisor or attorney for more complete information concerning your particular circumstances and any tax statements made in this material. SunAmerica Variable Annuities are issued by SunAmerica Annuity and Life Assurance Company. Products are marketed by SunAmerica, The Retirement Specialist. The purchase of a variable annuity is not required for and is not a term of the provision of any banking service or activity. Distributed by SunAmerica Capital Services, Inc., 21650 Oxnard Street, Suite 750, Woodland Hills, CA, 91367, 1-800-445-7862. M5170SS1 (3/12) Not FDIC or NCUA/NCUSIF Insured May Lose Value • No Bank or Credit Union Guarantee • Not a Deposit • Not insured by any Federal Government Agency Thank You for Attending!

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