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The WNA RoaDMAP sm Providing Direction for Your Retirement Journey.

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Presentation on theme: "The WNA RoaDMAP sm Providing Direction for Your Retirement Journey."— Presentation transcript:

1 The WNA RoaDMAP sm Providing Direction for Your Retirement Journey

2 The WNA RoaDMAP sm Retirement is defined as “the time after having stopped working.” This addresses “what” retirement is. but…

3 The WNA RoaDMAP sm Are you prepared to address the “when” and “how” of retirement? If not….. I

4 The WNA RoaDMAP sm R D M A P etirement istribution anagement ction lan oa sm

5 The WNA RoaDMAP sm The WNA RoaDMAP sm system provides the guidance you need to set your retirement journey on the right course.

6 The WNA RoaDMAP sm Retirement will cause a shift in your lifestyle. It will also cause a shift in your investment strategy… Changing the focus from accumulation to distribution of assets.

7 The WNA RoaDMAP sm When is the best time for me to retire? Do I have enough assets to retire? How do I manage these assets? How do I receive a regular income? Will my assets last my lifetime? What impact will Social Security have on my income?

8 The WNA RoaDMAP sm When is the best time for me to retire? The best time to retire is when it is right for you. Financially, the longer you delay retirement, the greater your monthly income will be.

9 The WNA RoaDMAP sm Almost all workers can begin collecting Social Security at age 62. Waiting to collect Social Security until age 70 can increase your monthly check by approximately 7% for each year you delay. Source: US News and World Report

10 The WNA RoaDMAP sm Do I have enough assets to retire? Depending on how much monthly income you require, we can help determine if you have enough assets to generate this income stream.

11 The WNA RoaDMAP sm As a general rule, your assets should be about 25 times the amount of annual income you require in retirement. For example, if you seek an income of $50,000 annually, you need approximately $1,250,000 in financial assets.

12 The WNA RoaDMAP sm This translates into a portfolio withdrawal rate of 4% per year. The RoaDMAP sm system starts with a standard rate of 4%, which is generally accepted as the “safe” withdrawal rate for long retirements.

13 The WNA RoaDMAP sm Depending on a variety of factors, the 4% withdrawal rate could be increased to as much as 6.5% or more per year.

14 The WNA RoaDMAP sm How do I manage these assets? You need to have an overall portfolio that is designed to provide downside protection but can still allow for moderate growth.

15 The WNA RoaDMAP sm A 60/40 asset allocation is used for your investment accounts. This represents a portfolio which is comprised of approximately 60% equities and 40% fixed-income securities. Your assets will be segregated into separate accounts that each have a specific objective.

16 The WNA RoaDMAP sm In addition, a WNA Cash Management Account is created, funded by assets from your investment account. The amount initially held in this account represents 3 years of living expenses.

17 The WNA RoaDMAP sm Why 3 years? Provides minimal risk of loss of principal Allows you to “ride out” market volatility

18 The WNA RoaDMAP sm How do I receive regular income? Funds from the WNA Cash Management Account will be withdrawn and credited to a checking account of your choice. You may receive the income on a monthly basis, or less frequently, depending on your preference.

19 RoaDMAP sm Route WNA IRA WNA Trust Acct WNA Joint Acct WNA Cash Management Account External Client Checking 60/40 Split Monthly

20 The WNA RoaDMAP sm Each year, the amount of monthly income will be increased by the Consumer Price Index (CPI) to keep your buying power intact.

21 The WNA RoaDMAP sm Why adjust the income to inflation? History tells us that since 1916, inflation, as measured by CPI, has: Averaged 3.5% per year. Been present in all but 11 years. Source: “But What If I Live?”, Dr. Gregory Salsbury, Ph.D

22 The WNA RoaDMAP sm What does this mean? Assuming $50,000 a year to live on today, and a 3% annual inflation rate, you will need more than double that amount or $101,640 in 25 years to maintain the same lifestyle.

23 The WNA RoaDMAP sm Will my assets last my lifetime? Using the withdrawal rate of 4%, (increased annually for inflation) the RoaDMAP sm system should meet your income needs for approximately 30 years.

24 The WNA RoaDMAP sm A current 65-year old man has a life expectancy of 17 years. 18% of these men will reach 90. A current 65-year old woman has a life expectancy of 20 years. 29% of these women will reach age 90.

25 The WNA RoaDMAP sm What impact will Social Security have on my income? Social Security will be a supplemental source of income. There are two key factors that determine the amount you will receive upon retirement.

26 The WNA RoaDMAP sm The First Factor: The amount of wages and salary you and your spouse paid into the Social Security System during your working years.

27 The WNA RoaDMAP sm The Second Factor: The age at which you elect to begin receiving distributions. At 62, your benefits will be reduced by 25% from the benefit you would have received at age 66. Conversely, at age 70, your maximum benefit will be 132% of what you would have received at age 66.

28 The WNA RoaDMAP sm In addition, there are other strategies to be pursued, if married or divorced. WNA Wealth Advisors, Inc. can assist you in evaluating your options to ensure that your benefits are maximized.

29 The WNA RoaDMAP sm On-Going Services  Long-Term Care Insurance  Life Insurance  Disability Insurance  Gifting  Estate Planning  Social Security Advice

30 The WNA RoaDMAP sm EEEExpertise EEEExperienced Team of Professionals RRRResponsive Service WWWWell-Established and Workable Investment Strategies

31 Employment Ends. Retirement Begins. Your Paycheck Continues. You Enjoy.

32 The WNA RoaDMAP sm Disclosure Page The preceding information is not a complete analysis of every material fact concerning any market, industry or investment. Data has been obtained from sources considered to be reliable, but WNA Wealth Advisors makes no representations as to the completeness or accuracy of such information. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses. Performance data quoted represents past performance and does not guarantee future results. The investment return and principal of an investment will fluctuate so that, when redeemed, may be worth more or less than the original cost.

33 The WNA RoaDMAP sm Happiness is a dividend on a well- invested life. Duncan Stuart Thank you for your time and attention in viewing this presentation.

34 The WNA RoaDMAP sm Managing Portfolio  Diversification  Rebalancing  Bond Maturity Laddering  Goal: Smooth out investment performance and yield higher returns

35 The WNA RoaDMAP sm Employment Ends. Retirement Begins. Your Paycheck Continues. You Enjoy.

36 Continuing Service  Assistance with –Long-term care insurance –Life insurance –Disability insurance  Advice regarding –Gifting –Estate planning strategies and desires

37 Base Withdrawal RateBase Withdrawal + Speed LimitBase Withdrawal + Speed Bump 4% Initial Withdrawal4.5% Initial Withdrawal4.7% Initial Withdrawal Ending Account Balance:$156,135Ending Account Balance:$286,209Ending Account Balance:$285,120 Total Withdrawals:$371,895Total Withdrawals:$329,323Total Withdrawals:$333,360 Withdrawal % of Portfolio Range:4.0% %Withdrawal % of Portfolio Range:3.6% - 7.5%Withdrawal % of Portfolio Range:3.9% - 7.7% Base Withdrawal + Speed Limit + Speed BumpBase Withdrawal + U-TurnAll Withdrawal Rules 5.2% Initial Withdrawal5.3% Initial Withdrawal6.5% Initial Withdrawal Ending Account Balance:$277,476Ending Account Balance:$402,932Ending Account Balance:$230,263 Total Withdrawals:$325,526Total Withdrawals:$360,472Total Withdrawals:$332,746 Withdrawal % of Portfolio Range:3.8% - 7.5%Withdrawal % of Portfolio Range:3.4% - 7.4%Withdrawal % of Portfolio Range:4.6% - 9.4%

38 Historical ReturnsAll Withdrawal Rules Year Large Co. Stocks Interm. Bonds CPI 6.5% Initial Withdrawal Annual Withdrawal Increase % Rule % of Portfolio %Speed Bump7.48% %Detour9.42% %Detour7.84% %CPI Increase6.38% %Speed Bump6.94% %Speed Limit7.38% %CPI Increase5.41% %Open Road5.09% %Open Road4.76% %Open Road4.62% %Open Road4.71% %Speed Bump5.48% %Speed Bump6.13% %Speed Bump7.39% %CPI Increase6.87% %CPI Increase7.07%

39 The WNA RoaDMAP sm Do I have enough assets to retire? The amount of assets you have will be used to generate a monthly stream of income for you. Your lifestyle and spending will determine how far the money will go.

40 The WNA RoaDMAP sm As a general rule, you should have 25 times the amount of annual income you seek in retirement. For example, if you seek an income of $50,000 annually, you need a total of $1,250,000 in assets.

41 The WNA RoaDMAP sm Withdrawal rates 100% 100% 84% 84% 100% 100% 88% 88% 76% 76% 64% 64% 72% 72% 56% 56% 44% 44% 100% Equities 60% 40% 40% 60% 100% Bonds Back-testing Withdrawal Rates on Indexes 25 Rolling 25-year periods from Based on hypothetical $100,000 initial investments in the Ibbotson Large Company Stock Index as measured by the S&P 500 Composite Index) and/or the Ibbotson Lon term Corporate Bond Index (as measured by the Citigroup Long Term High Grade Corporate Bond Index), portfolio rebalanced annually, with monthly withdrawals totaling 45, 5% and 6% annually, increasing 4% each year to account for inflation, over rolling 25-year periods from 12/31/1958 to 12/31/ % 60% 100% Bonds 50% 4% 5% 6%

42 The WNA RoaDMAP sm Structuring  Developing a portfolio that generates a steady stream of income  Providing cash reserves to avoid liquidation in market downturns  Maximizing tax efficiency

43 For example, assume that a worker qualifies for full benefits of $1,600 a month at the age of 66. Now assume this worker elects to begin collecting benefits at age 62. The monthly benefit would be reduced by 25%, to $1,200. If that worker were to delay collecting benefits until age 70, the monthly benefit increases to $2,100 per month.


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