Retirement – 44 Flashcards
(44.2) Three phases of retirement
Accumulation
Consolidation
Distribution
(44.2) Retirement planning phase: capital ___ occurs during months working years, roughly between ages 30 and 55.
Accumulation
(44.2) Retirement planning phase: client restructures the investment portfolio to a more conservative allocation that will be subject to less fluctuation in asset value.
Consolidation
(44.2) Retirement planning phase: the retiree is collecting from private investments, Social Security, any employer sponsored qualified or nonqualified plans, and individually directed qualified plans, such as IRAs and Roth IRAs.
Distribution
(44.4) Two ways to set up a projection of desired retirement income
Income replacement ratio
Retirement income analysis
(44.11) If the client is concerned about outliving his or her assets, the client might want to consider purchasing?
An annuity or using the capital preservation method
(44.11) capital preservation method
Assumes the client will live on the earnings generated by his or her investment portfolio
Examples of guaranteed lifetime income streams
Pension and Social Security
(44.11) Capital utilization method
Assumes all assets are gradually liquidated during retirement to meet the client’s objectives
(44.4) The ___ method requires a client to estimate a ballpark percentage of pre-retirement income which appears to be adequate to provide a standard of living at retirement, comparable to that being enjoyed pre-retirement. This method is appropriate when retirement is ___.
- income replacement ratio
- a decade or more in the future
(44.12) A single premium deferred annuity that a structure to begin payout at a specific age typically around age 85.
Longevity insurance
(44.4) The __ method requires more systematic gathering of client information and should be used when the client approaches retirement.
retirement income analysis
