The retirement market is growing fast. Every day, over 1,000 baby boomers enter the retirement phase of their lives1. You can help them make the transition with confidence with Sun Life Financial’s Money for Life™ web app—a powerful resource that brings retirement planning to life and can help you build your retirement business, one conversation at a time.

With the Sustainable income demo on this web app, your clients and prospects can easily discover how adding a life annuity to their retirement income plan could help them enjoy their retirement.

It’s simple to use – an interactive, informative, and interesting tool – available at your fingertips on your iPad, laptop, or PC – anytime, anywhere.

Ultimately, they’ll see that selecting a payout annuity can lead to a higher total income and a reduced risk of outliving their money, even in a low interest rate environment.

By completing three easy steps in the Sustainable income demo, you can show your clients how a life annuity can work for them:

Step one

Select male or female to establish a general life expectancy.

Step two

Choose an original premium for the life annuity and the asset mix of the investment portfolio:

  • Slide the bar on the graph to choose total registered assets available to invest for retirement income.
  • Select the mix for the investment portfolio and the net return; for example, 40% equity and 60% fixed income, with a net return of 5.5%.

Step three

Enter additional information about the life annuity and the investment portfolio:

  • Slide the bar on the graph to choose the portion of registered assets used to buy the life annuity, up to a maximum of 50% (since a client shouldn’t rely on a payout annuity for all retirement income).
  • Slide the bar on the graph to choose the withdrawal rate from investment portfolio, ranging from 3% to 6%.

Results

A graph automatically calculates the total annual income the investor can expect to receive per year, after tax, from the investment portfolio and the life annuity, guaranteed for life. The tool also highlights the difference in annual income when a life annuity is part of their retirement plan.

Colour-coded bars on the graph clearly show the positive results of saving for retirement and any areas of risk:

  • green: little risk money will run out
  • yellow: more risk money will run out
  • red: high risk money will run out.

Current rates generate the annuity income. As rates rise, the story gets even better. More green generated on the graphs means higher sustainability for the income portfolio.

Show your clients and prospects how to balance income and risk in retirement. Let them try different numbers, compare the results of their choices, and ask questions. It’s a great way to start a conversation about retirement planning and illustrate the value of payout annuities as part of a retirement plan.

To access the Sustainable income demo on the Money for Life web app contact your Sun Life Sales Director.

Please note: The demonstration in this tool is presented for information purposes only. It is not an illustration, and doesn’t replace professional, legal or tax advice. The figures are not guaranteed. The required registered retirement income fund (RRIF) minimum has not been factored into the investment portfolio income; additional income will likely need to be withdrawn from the portfolio to meet the legislated minimums. Withdrawing a greater amount to meet the required minimum will cause the portfolio assets to be depleted earlier than demonstrated.

1 Household balance sheet report, Investor Economics, 2010.

Originally published on Advisor.ca