Overview

Satisfying the needs and objectives of today's retirees is a lot easier when you have the tools it takes to create flexible, outcome-focused retirement income strategies. For example, investors increasingly crave outcomes that are predictable. Advisors, therefore, may be required to include lifetime income benefits within the context of a larger retirement income plan. But how is the value of lifetime income conveyed? And how is it illustrated in conjunction with risky investments that the investor may view as critical to creating upside growth potential? In other words, how are different types of products with different risk characteristics unified within one retirement income framework?

That question is answered by the illustration system Wealth2k has developed for The Income for Life Model. Virtually any construction of retirement income strategy can be crafted including time-segmented strategies with as few as two or as many as nine segments. In addition, the advisor may define the characteristics of individual segments including segment duration (one year to lifetime), the rate rate-of-return assumption, the assumed inflation rate and liquidation factor.

Lifetime income benefits may be illustrated beginning in any segments, meaning that multiple lifetime income streams can be staged across the income plan timeline. The software will solve for an income "floor," and it will recognize the investor’s external income sources in calculating the funding for the floor.