The Retirement Journey Powered by Iport Presented by : Philip - - PowerPoint PPT Presentation

The Retirement Journey – “Powered by Iport”

Presented by : Philip Howlin

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Objective

“To encourage you to use one of the easiest and best tools in the market to help you grow your business”

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Agenda

• Section 1: The Retirement Journey
• Section 2: The Retirement Journey Powered by

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How are you planning on spending your retirement?

• Maintain same standard of living
• More time with family and friends
• Pursue leisure activities
• Travel
• Pass on funds to family
• And more…

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Are there any barriers to you in Retirement?

How are you going to pay for that lifestyle

• nce you stop

working?

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A lot of noise!

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How will you fund your income in retirement?

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Step 1: Estimate Retirement Expenses

• Start with how much you spend
• What expenses will you have to pay in retirement e.g. health insurance
• What extra expenses do you want to budget for in retirement e.g. world travel
• Do you have expenses that will decrease in retirement e.g. Mortgage
• Most people underestimate what they will spend !!

5 simple steps to help you on your Journey

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Step 2: Estimate tax paid on Retirement Income

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Target Tax Free Income at Retirement

Income exemption limits: Age 65 or over Single Married

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Step 3: Use the 4 Pillars of Retirement

State Pension Current Pensions Investment funds & Properties Keep Working

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Pillar 1: State Pension

€12,000 per individual* €24,000 per couple*

State Pension is €12,956 per year per individual and €25,912 per couple. This figure has been rounded down to €12,000 and €24,000 for illustration purposes.

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Pillar 2: Current Pension

Generous tax relief on your pension contributions Tax free growth Pre retirement Post retirement Tax free lump sum Possibility of tax free regular income in retirement

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• Portfolio holdings:

Can be used to generate annual income or to drawdown in conjunction with your pension.

• Investment Properties:

Sale of property & rental income.

Pillar 3: Investment Income

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• Continue to work
• Part-Time
• Seasonal
• Consultancy

Pillar 4: Work

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Build a fund of €400,000 Step 4: Build your pension fund

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AMRF & ARF €300,000 (4% drawdown p.a.) €12,000 p.a. Retirement Fund €400,000 Tax Free Cash 25% of Fund €100,000 Annuity Income €300,000 (4% Annuity) €12,000 p.a. 1.5 times Salary €100,000

• 20 years service
• Salary of €66,666

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Cost per couple to reach this target

To achieve €36,000 income and €100,000 lump sum Age 30 €156 net a month each Age 40 €214 a month each Age 50 €468 a month each

Premiums include tax relief of 40%. Based on taking tax free lump sum, retiring at 65. 6% growth rate assumed. Mgmt fee 1.25%. 100% allocation.

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Step 5: Get the right Investment Advice

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Iport: Investment & Savings

• Andy Ivory Corr’s three golden rules, clarify:
• 1. Objective
• 2. Attitude to Risk
• 3. Time Frame

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New Irelands Fund Breakdown by Esma Ratings Esma 3 Esma 4 Esma 5 & 6

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Section 2: Retirement Journey Powered by Iport

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Overview of a Client Financial Plan

(earnings timeframe) (outlay timeframe)

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5 Building Blocks to Iport

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• 1. Risk Questionnaire

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• 2. Attitude to Risk
• Compliance – Most comprehensive in the market
• Builds in the term of the investment / pension / ARF
• ATR can be emailed to the client

(save 15 minutes in a meeting)

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• 3. Fund projections – Stochastic Modelling
• Compliance – the UK you have to show a form of this illustration
• Opportunity to manage expectations
• Guaranteed to lose the client money at some stage, have the conversation early, build better

relationship

• Helps the client focus on the journey and not the short term performance
• Realistic growth rates using Ifunds

Risk Assumed Asset Mix Expected Return Standard Deviation 3 iFunds 3 3.5% 6.0% 4 iFunds 4 4.6% 8.6% 5 iFunds 5 5.7% 12.2% 6 iFunds Equities 6.3% 15.5%

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Pre Retirement Journey Client

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AMRF & ARF €300,000 (4% drawdown p.a.) €12,000 p.a. Retirement Fund €400,000 Tax Free Cash 25% of Fund €100,000 Annuity Income €300,000 (4% Annuity) €12,000 p.a. 1.5 times Salary €100,000

• 20 years service
• Salary of €66,666

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Post Retirement Client

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Adequacy In an ideal world….what do retirees need?

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Poor value at today’s prices Guaranteed income for life Simple design

What do we have? Annuities

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Need to set “realistic” level of income Longevity “Bomb out” risk Investment and volatility risk

What do we have? AMRF & ARF

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• Customers tend to value adequacy over sustainability
• Retirees focussed on income generation and most view current annuity rates as bad

value for money

• Annuity purchase tends to come from OPS

– Highest lump sum via salary and service

• Where there is choice trends show majority of people will go for the ARF/AMRF

So where does that leave us?

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How are retirement benefits being taken?

By claim count By fund value

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Post Retirement Client

• Specific Post retirement questionnaire - not a one size fits all
• Post Retirement ATR with term built in
• A tool for managing your clients retirement income
• Builds in life expectancy
• Ability to compare and contrast ARF vs Annuity
• Flexibility to illustrate and calculate bomb out risk on different income drawdowns

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Example – Imputed Distribution

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Conversation opportunity? Risk category 3 Risk category 5

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How can New Ireland help you on the journey?

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• 1. Bring your client on a Journey with Iport

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• 2. Professional Reports: New & Existing customers

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• 3. Unique Death benefit

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• 4. Sentinel Fund – Behavioural Management

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Sample ARF Investment Proposal

• 4% deemed distribution requirement
• 5 years of withdrawals: 20% invested in a

low risk fund

• 80% invested in growth assets
• Client requests withdrawals from low

risk fund only

Deemed distribution

Prime/iFunds Sentinel

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• 5. Reduce Sequencing Risk with Risk Managed Funds

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Good sequence rolling 5 yrs: 18%, 12%, 8%, -5%, -15% Bad Sequence rolling 5 yrs: -15%, -5%, 8%, 12%, 18% 3.6% p.a.

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Summary of Iport: Pre & Post Retirement

• Most compliant end - to - end system in the market
• Easiest to navigate
• Most time efficient to build professional reports with your Company Log.
• Flexibility to use for all clients and include external companies
• Projections allow the Adviser to bring the client on a journey
• Most clients don’t get to see what they will receive at retirement age
• Usually backward looking and only focused on performance
• Risk rates overall assets
• Ability to build customised portfolios
• Helps bring your client on a journey and be less product or performance focused.
• Iport is a complimentary tool to our brokers (no cost at present)

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Compliance Notice

Important Note

Past performance may not be a reliable guide to future performance and the value of investments may fall as well as rise. Terms and conditions apply. While great care has been taken in its preparation, this presentation is of a general nature and should not be relied on in relation to a specific issue without taking appropriate financial, insurance, investment or

• ther professional advice. The content of this presentation is for information purposes only

and does not constitute an offer or recommendation to buy or sell any investment, or to subscribe to any investment management or advisory service. New Ireland Assurance Company plc is regulated by the Central Bank of Ireland and is a member of the Bank of Ireland Group. State Street Global Advisors Ireland Limited is regulated by the Central Bank of Ireland under the Investment Intermediaries Act, 1995.

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