Retirement Planning
As we obey the counsel to avoid
and get out of debt now, we use
our agency and obtain liberty to use
our disposable income...
To those of you who are not yet to
the season of life when you might
serve a couple mission, I urge you
to prepare now for...
Social Security
Defined Benefit
Plans
Personal Savings
(IRAs / 401k)
Employment
Earnings
Defined Benefit Only
Defined Contribution Only
Both DB and DC Plans
26
67
7
22
16
62
Worker Participation Percentage by Pl...
Social Security
Employer Pension
401(k) - IRA Savings
66
11
13
49
19
21
21
21
42
Largest Source of Retirement Income
Sourc...
How Much?
Inflation Longevity Market
Spending Income Issuer
Healthcare
Household
Shock
Public Policy
Retirement Risks
Source: Retirem...
Inflation Longevity Market
Spending Income Issuer
Healthcare
Household
Shock
Public Policy
Investment Related Retirement Ri...
How Long?
For healthy 65 year-old couples
50% chance one spouse will live to age 92
Source: Annuity 2000 Mortality Tables, NewYork L...
For healthy 65 year-old couples
25% chance one spouse will live to age 97
Source: Annuity 2000 Mortality Tables, NewYork L...
Mind the Gap
Gap = Living Expenses less
Social Security & Pension
$50,000 - $20,000 = $30,000
Social Security Estimate
www.ssa.gov/oact/
quickcalc/index.html
Spending Rate =
Gap / Nest Egg
$30,000 / $750,000 = 4%
0
10
20
30
40
50
60
70
80
2% 3% 3.5% 4% 4.5% 5% 6% 7% 8% 9% 10%
30% Equity 70% Fixed 50% Equity 50% Fixed 70% Equity 30% F...
0
10
20
30
40
50
60
70
80
2% 3% 3.5% 4% 4.5% 5% 6% 7% 8% 9% 10%
60Year Old 65Year Old 70Year Old
Annual Spending Rate
Prob...
13.1%
29.2%
Probability
of Ruin
50% Equity 50% Fixed Income Portfolio
6.3%
4.5%-28.0%
Spending RateReturn
1%
10%
Single Premium Immediate
Annuity
also know as
Lifetime Income Annuity
Lifetime Income Annuity
Estimate
www.immediateannuities.com
Joint Life Income (100% to
Survivor)
65Year Old Couple
$30,000 annual = $504k
Real interest rate (i.e. net of inflation) 3%
Years until retirement 25
Current Savings $150,000
Annuity Cost $504,000
Addi...
Simple Retirement
Calculator
bit.ly/aqDyWn
3% ???
Questions and Answers
Retirement Planning - Self Reliance Fair
Retirement Planning - Self Reliance Fair
Retirement Planning - Self Reliance Fair
Retirement Planning - Self Reliance Fair
Retirement Planning - Self Reliance Fair
Retirement Planning - Self Reliance Fair
Retirement Planning - Self Reliance Fair
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Retirement Planning - Self Reliance Fair

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Slides presented November 6, 2010 at LDS Self-Reliance Fair, Rexburg Idaho

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Retirement Planning - Self Reliance Fair

  1. 1. Retirement Planning
  2. 2. As we obey the counsel to avoid and get out of debt now, we use our agency and obtain liberty to use our disposable income for helping and blessing others. - Robert D. Hales, October 2010
  3. 3. To those of you who are not yet to the season of life when you might serve a couple mission, I urge you to prepare now for the day you and your spouse may do so. As your circumstances allow, as you are are eligible for retirement, .... - Thomas S. Monson, October 2010
  4. 4. Social Security Defined Benefit Plans Personal Savings (IRAs / 401k) Employment Earnings
  5. 5. Defined Benefit Only Defined Contribution Only Both DB and DC Plans 26 67 7 22 16 62 Worker Participation Percentage by Plan Type Source: Employee Benefits Research Institute 1979 2008 % % % % % %
  6. 6. Social Security Employer Pension 401(k) - IRA Savings 66 11 13 49 19 21 21 21 42 Largest Source of Retirement Income Source: Pew Research Center Current Retirees Baby Boomers Ages 41-49 Adults Ages 18-40 % % % % % % % % %
  7. 7. How Much?
  8. 8. Inflation Longevity Market Spending Income Issuer Healthcare Household Shock Public Policy Retirement Risks Source: Retirement Income Industry Association
  9. 9. Inflation Longevity Market Spending Income Issuer Healthcare Household Shock Public Policy Investment Related Retirement Risks Source: Retirement Income Industry Association
  10. 10. How Long?
  11. 11. For healthy 65 year-old couples 50% chance one spouse will live to age 92 Source: Annuity 2000 Mortality Tables, NewYork Life
  12. 12. For healthy 65 year-old couples 25% chance one spouse will live to age 97 Source: Annuity 2000 Mortality Tables, NewYork Life
  13. 13. Mind the Gap
  14. 14. Gap = Living Expenses less Social Security & Pension $50,000 - $20,000 = $30,000
  15. 15. Social Security Estimate www.ssa.gov/oact/ quickcalc/index.html
  16. 16. Spending Rate = Gap / Nest Egg $30,000 / $750,000 = 4%
  17. 17. 0 10 20 30 40 50 60 70 80 2% 3% 3.5% 4% 4.5% 5% 6% 7% 8% 9% 10% 30% Equity 70% Fixed 50% Equity 50% Fixed 70% Equity 30% Fixed Annual Spending Rate Probability of Retirement Ruin - 65Year Old % % % % % % % %
  18. 18. 0 10 20 30 40 50 60 70 80 2% 3% 3.5% 4% 4.5% 5% 6% 7% 8% 9% 10% 60Year Old 65Year Old 70Year Old Annual Spending Rate Probability of Retirement Ruin - 50% Equity / 50% Fixed % % % % % % % %
  19. 19. 13.1% 29.2% Probability of Ruin 50% Equity 50% Fixed Income Portfolio 6.3% 4.5%-28.0% Spending RateReturn
  20. 20. 1%
  21. 21. 10%
  22. 22. Single Premium Immediate Annuity also know as Lifetime Income Annuity
  23. 23. Lifetime Income Annuity Estimate www.immediateannuities.com
  24. 24. Joint Life Income (100% to Survivor) 65Year Old Couple $30,000 annual = $504k
  25. 25. Real interest rate (i.e. net of inflation) 3% Years until retirement 25 Current Savings $150,000 Annuity Cost $504,000 Additional Savings for Inflation Protection $100,000 Minimum Annual Savings to Fund Annuity $9,427 Min Annual Savings to Fund Annuity + Protection $12,090 Simple Retirement Calculator
  26. 26. Simple Retirement Calculator bit.ly/aqDyWn
  27. 27. 3% ???
  28. 28. Questions and Answers

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