A sound retirement income strategy addresses three fundamental income components:
- Growth potential;
- Access to liquid assets; and
- Predictable income.
Actively managing the allocation of your retirement savings to these three components is a key to retiring confidently.
By investing and separating your assets this way, you may be better able to accomplish multiple goals with different assets and diversify risk. Thinking of your assets this way may help protect your predictable income while allowing the growth portion of your portfolio to grow more efficiently by reducing the need for withdrawals.
Let’s take a look at examples of assets we might typically find in each component.
1. Predictable Income – Reliable income sources to cover necessary expenses. Includes sources that can guarantee income for life, regardless of financial market performance.
- Certificates of Deposit
- Fixed annuities
- Income annuities
- Pension benefits
- Social Security retirement benefits
- Annuities with guaranteed minimum withdrawal benefits (GMWB)1
2. Access to liquid assets for emergencies, supplemental income or discretionary spending.
- Certificates of Deposit
- Money market accounts
- Cash value life insurance
- Fixed annuities
3. Growth Potential – Long-term asset appreciation to offset the effects of inflation or leave a legacy to heirs.
- Stocks and bonds
- Variable annuities
- Mutual funds
|Bonds||A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate.|
|A permanent life insurance policy that builds cash value.|
|• A savings certificate entitling the bearer to receive interest.
• A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination.
• CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years.
|Fixed Annuity||A type of annuity that provides payment of a specific sum of money at a fixed rate of return for a fixed period of time.|
|Income Annuities||• Annuities designed to provide a guaranteed income stream that begins immediately or at a future time you choose.
• There is little to no liquidity with income annuities.
|Money Market||A segment of the financial market that trades in financial instruments with high liquidity and very short maturities.|
|Mutual Fund||An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.|
|Stocks||A type of security that signifies ownership in a corporation.|
|Variable Annuity||• A variable annuity is a contract offered by an insurance company that can be used to accumulate tax-deferred savings.
• Allocate assets among a number of subaccounts or investment portfolios which invest in corresponding underlying funds offered through the contract.
• Your contract value, which fluctuates over time, reflects the performance of the underlying investments held by the funds you have selected, minus expenses.
|A Guaranteed Minimum
Withdrawal Benefit (GMWB)
|• A ‘living benefit’ generally available as an optional feature with underlying investment products, such as a variable or indexed annuity.
• Does not guarantee the performance of any underlying investment; does guarantee that a specific amount will be available for withdrawal for as long as the annuitant lives. Excess withdrawals, however may have a negative impact on the guaranteed income amount.
The following disclosures do not apply to CDs:
- NOT FDIC / NCUA INSURED
- NO BANK / CREDIT UNION GUARANTEE
- MAY LOSE VALUE
- NOT INSURED BY ANY GOVERNMENT AGENCY
- NOT A BANK / CREDIT UNION DEPOSIT OR OTHER OBLIGATION
For more information, please contact:
Financial Sales Representative
CA Insurance License #OG60868
Patricia Ward, LUTCF
Financial Services Representative
CA Insurance License #OG72810
 Guarantees and payments of lifetime income are based on the claims-paying ability of the issuing company.
The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
Before purchasing a variable annuity or mutual fund, you should carefully consider the investment objectives, risks, charges and expenses. For this and other information, obtain the prospectus from your registered representative. Please read the prospectus carefully before investing or sending money. You may also obtain the prospectuses (or summary prospectuses, if available) for the mutual fund or an annuity’s underlying investment choices from your registered representative.
Annuity products are issued by Massachusetts Mutual Life Insurance Company and C.M. Life Insurance Company. C.M. Life Insurance Company,
Enfield, CT 06082, is a subsidiary of Massachusetts Mutual Life Insurance Company, Springfield, MA 01111.
Securities products and services offered through registered representatives of MML Investors Services, LLC, Springfield, MA 01111-0001 or a broker-dealer that has a selling agreement with MML Strategic Distributors, LLC Springfield, MA 01111-0001. Both MML Investors Services, LLC and MML Strategic Distributors, LLC are subsidiaries of MassMutual, Springfield, MA 01111-0001.
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MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives.