How it Works
In one popular approach, your deposit is shown as being allocated to six “segments” that will hold investment assets ranging from very conservative to aggressive. Segment One, the most conservative, receives the largest portion of your deposit – 28%. Successive segments receive, 26%, 20%, 13% 7% and 6% (total 100%). The segments receiving the smallest amount of money are those which hold progressively more aggressive assets. The more aggressive an investment, the more risk it is subject to. These segments will be held for the longest period of time in an attempt to achieve the best possible chance of excellent investing results.
Investment strategies may be subject to various types of risk including, but not limited to, market risk, credit risk, interest rate risk, and inflation risk.
The Personalized Analysis
The Personalized Analysis describes your custom plan for creating monthly retirement income.
It shows how your savings can be divided into multiple segments, each one earmarked to produce monthly income during various phases of your retirement: years 1-5, 6-10, 11-15, 16-20, and 21-25. The goal is to increase your income as you age.
Your income plan will include a “Floor”, made up of those income sources which are stable and predictable- Social Security, pensions, and income from annuities- and an “Upside,” which is that portion of your savings exposed to investment risk. In this way, some of your money is exposed to market-based growth potential, but your base monthly income is always predictable because it is produced by income sources that are not exposed to market risk. This is the key to a disciplined plan that seeks to keep pace with inflation, and that you can keep consistent with throughout retirement, and through all economic conditions.
Investments in model strategies may expose the investor to risks inherent with the model and the specific risks of the underlying investment directly proportionate to their allocation. All investments involve the risk of potential investment losses, including the loss of some or all of your principal.
© Copyright 2005- Wealth2k, Inc.
WEALTH2K, INC. DOES NOT PROVIDE INVESTMENT ADVICE.
The projections or other information generated by The Income for Life Model calculator related to total returns are hypothetical illustrations of mathematical principles that do not predict or project the performance of an investment or investment strategy. The computations of future returns are based upon assumed variables and inputs made directly by the user and does not guarantee future results. Moreover, the computations do not reflect investment costs or taxes, if any.
The Income for Life Model, Hybrid Time-Segmentation and ROI Reliability of Income are registered trademarks of Wealth2k, Inc. Three Big Risks, Constrained Investor, What's My Income, What's Your Income? and Income Floor are trademarks of Wealth2k, Inc. Knowing Your Number is Not the Same as Knowing Your Income is a service mark of Wealth2k, Inc.
Investing involves risk and you may incur a profit or a loss. There is no guarantee this model will perform as planned. If the model underperforms, the income levels and assets could be significantly reduced.
Purchase of an annuity contract through a qualified plan does not provide any additional tax-deferral benefits beyond those already provided through the plan. If you are purchasing an annuity contract through a plan, you should consider purchasing it for its death benefit, annuity options, and other non-tax-related benefits.
Jeffrey Bettermann, RFC is not affiliated with Wealth2k.