Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive a significant portion of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t receive for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive a significant portion of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Ottawa is sending a “clear signal” about insurance sales from banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t receive for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive a significant portion of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales from banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t receive for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive a significant portion of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales from banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t receive for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive a significant portion of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales from banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t receive for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive a significant portion of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales from banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t receive for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive a significant portion of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales from banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t receive for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive a significant portion of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales from banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t receive for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive a significant portion of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout will only come when you turn 85. “If you don’t live to be 85, you get nothing,” he says.
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So why bother paying for a policy that you either won’t receive for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive a significant portion of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
(08/06/06)
As baby boomers retire, look for more innovative products that combine investments with insurance and offer benefits similar to a defined benefit retirement plan.
While this may describe a standard annuity or segregated fund, York University finance professor Moshe Milevsky says these products are just the beginning.
“These are products that are designed to create systematic withdrawal plans that will last for the rest of your life,” Milevesky told attendees at the Morningstar Retirement Income Planning Conference on Wednesday.
An example of a product being introduced is long-term care insurance combined with an annuity. So if the policyholder has to go to a nursing home prematurely, the costs will be covered. However, if the policyholder does not need to go into a nursing home and remains healthy for life, the policy will still pay out. Milevsky notes that this product has already gained popularity in the US. “It essentially combines two types of risk that would be much more expensive independently than combined together.”
Another product development is what Milevsky calls advanced whole life insurance, which pays out only when you exceed your life expectancy. So if you take out this policy in your 40s, the payout won’t be granted until you turn 85. “If you don’t live to be 85, you get nothing,” he says.
More Conference collection:
Stories are what sell YOU
The retirement boom is driving new investment strategies
Insurance advisors want more from their MGAs
MGA companies put technology at the forefront
Ottawa is sending a “clear signal” about insurance sales at banks
Approach to the HNW plate
Industry association IDA reveals new name
Investment dealers enjoying record profits
Come back to Conference collection Home
So why bother paying for a policy that you either won’t get for 40 years or at all? Milevsky says the monthly premium will be small – about $30 – and if you live to age 85, you’ll receive a huge payout.
To prepare for smoother retirement income planning, advisors must help their clients understand all risks, Milevsky adds. Contain:
Inflation: In the long run, the purchasing power of income decreases. “Too many people think about income in nominal terms,” explains Milevsky. “We need to pay more attention to real incomes and, in some sense, pensioners’ incomes after inflation, rather than the incomes of the general public. Over 30 years, inflation can reduce your income by half to three-quarters.” Jamie Golombek, vice president of tax and estate planning at AIM Trimark Investments, agrees. He notes that seniors typically like GICs because they are considered “risk-free”, but an AIM Trimark study of annual GIC returns for 2002–2005 showed negative returns after adjusting for inflation and tax (assuming a 35% tax rate ). .
Golombek recommends that clients consider insured annuities as part of their portfolio because they will likely earn a greater monthly after-tax income with an insured annuity than with a GIC – for the same investment amount. Annuities can also provide some customers with greater peace of mind. “When you buy a GIC, you are subject to reinvestment rates. You have no idea what the interest rate on your reinvestment will be in five years,” he said at the conference. “But if you buy this annuity today, you will know forever. You are guaranteed to know how much money you will receive for the rest of your life.” It only recommends some because purchasing an annuity is an irreversible decision.
Length of life: Many advisors underestimate an individual’s life cycle, so the average mortality rate should be taken into account to ensure that retirement income will last as long as clients do. Next, advisors must consider whether annuities should be part of their clients’ portfolios. As a university professor, Milevsky would not be a good candidate for an annuity because he will receive much of his income through a DB plan for the rest of his life. A person who is not in this situation will not be so lucky.
The moment of withdrawal: When a client retires, it affects how long their money will last, even though they have the same asset allocation, investments, and advisor as someone else who retires three years earlier or later. “While proper asset allocation reduces risk and improves portfolio stability, there is a certain amount of financial risk that cannot be removed by asset allocation alone,” says Milevsky.
“When I sit in retirement with so much wealth and start to withdraw, I run the risk that my asset allocation won’t be able to help me. It’s not a question of “OK, let’s move on to bonds,” because it’s no longer about asset allocation, it’s about protection and risk management.
Reported by Deanne Gage, Advisor’s Edge, deanne.gage@advisor.rogers.com
