NAIFA Convention

1
NAIFA Convention Career ConferenceOrlando
World Center Marriott ResortSeptember 15, 2009

• Optimizing the Retirement Income Planning Process
• Steven L. Welton, CLU ChFC
• Vice President, Strategic Marketing
• UNIFI Companies

2
Retirement Income

• Definition
• -The stage at which a households focus switches
  from accumulating assets for retirement to using
  those assets to provide a lasting and predictable
  stream of income that will maintain a desired
  standard of living
• -At this stage, the household is in need of
  tax-efficient financial advice and solutions to
  establish that reliable income stream and to
  minimize the risks on those potentially declining
  assets to provide a satisfactory and manageable
  sense of well being.

3
Market Need Positioning for Retirement Income
Planning
4
Practice Readiness

• Skills and Competencies
• Insurance
• Investments
• Social Security
• Health Care
• Real Estate
• Elder Care issues
• Designations CASL American College
• CRPC College for Financial Planning
• CRC InFRE
• Tools and Process
• Changing Practice Economics

5
Expanding Professional Networks
6
Advice-Based Planning
7
Pre-Retirees May Change Advisors To Get The
Services They Need
No change
Added or switched brokers and advisors within 15
years of retirement

• Source McKinsey Co. Managing Retirement
  Income Innovative Strategies to Capture and
  Retain Retirement Income, 2006

8
Fidelity Research

• When a retirement income plan was developed
• - 50 more clients were very satisfied
• - 77 of clients did or would consolidate
• - 95 of those clients would provide
  referrals

Source Fidelity Advisor 2006 Survey of Investors
at Retirement
9
Retirement Income Management Process
5. Convert resources into income
6. Maintain and update the plan
6. Maintain and update the plan
4. Identify options for addressing gaps
1. Estimate duration of retirement assets
2. Identify and manage retirement risks
3. Identify distribution, tax and estate issues
and opportunities
Data Collection
Source InFRE International Foundation for
Retirement Education, 2009
10
Approach to Market
More experienced, and more advice oriented
MARKET
More Upscale and/or Pre-retirement
Comprehensive Tool
Advisor
1.
Comprehensive Plan and Product Solution
A
Simple Tool
Advisor
Development of a Simplified Plan Multiple Product
Solution
2.
Customers
B
Advisor
Single Packaged Concept Pre-defined Product
Concept
Simple Tool or Calculator
3.
C
MARKET
Less Upscale and/or Post -retirement
11
Planning Tools

• Development of a Retirement Income Plan
• Goals based
• Cash flow based
• Identify essential vs. discretionary expenses
• Additional Planning Capability
• Accounts you manage
• Outside accounts
• Asset Allocation
• Client Management

12
How To Manage Retirement Income
Essential Expenses
Discretionary Spending
Fill Income Gap (A)
Fill Income Gap (B)

• Lifetime Income Sources
• Social Security
• Pensions
• Annuities
• Other lifetime income sources

• Managed Income Sources
• Taxable assets
• Personal retirement accounts
• Employment income
• Other variable sources

Source InFRE International Foundation for
Retirement Education, 2009
13
Planning Tools

• Other important considerations
• Client profile
• Learning curve
• Anticipated usage
• Back office support

14
Planning Tools
Comprehensive Planning
Calculators
15
eMoney Advisor
Licensed advisors have access to their own
personal branded, representative website. This
allows monitoring of a clients assets and
liabilities, as well as creation of in-depth cash
flow analysis, or modular based scenarios.
16
One of the features of the Wealth Management
System is the ability to create a customized
financial plan to suit any client situation.
17
Comprehensive Planning
Planning for retirement incorporates all of the
elements of financial planning. You must account
for income, expenses, investments, and taxes.

• The Retirement Income planning process covers
• Looking at retirement timeframes and longevity
  issues.
• Analyzing your basic and discretionary retirement
  expenses.
• Understanding your guaranteed sources of income.
• Planning your reliable income for a strong
  retirement foundation.
• Understanding risk and the power of time in
  investing.
• Developing a long-term investment strategy.
• Creating an asset withdrawal strategy.
• Protecting your plan.
• Implementing and maintaining your plan.

18
Retirement Income Module
The Retirement Income Tool allows you to monitor
your clients income during their retirement
years. The system allows you to perform several
techniques and stress tests.
19
Another feature of the Retirement Income Tool, an
in-depth spending analysis, keeping your client
on track during their retirement years.
20
Client Personal Home Page
The clients Personal Financial Home Page is
where daily updates of all accounts are located
in one customized website, accessible anywhere an
internet connection is available.
21
Electronic Document Storage
The Vault is an online secure storage facility
that houses and protects a clients valuable,
personal documents such as wills, trusts,
insurance documents and passports in an
electronic format. Video and sound clips can
also be stored. The Vault is an excellent
safeguard against storms or other natural
disasters.
22
Methodologies
Annuity Payouts
23
Methodologies
Systematic Withdrawals
24
Methodologies
Income Only Plans
Bonds
Life Insurance
CD
Real Estate
Dividends
Laddering
Rental Income REITs Reverse Mortgages
25
Product Solutions
Tax free income is based on withdrawals to
basis then loans. Loans and withdrawals will
reduce the policys death benefit and cash value
and may cause the policy to lapse. Adverse tax
consequences may occur if the policy lapses.
26
Product Solutions (contd)
27
Product Solutions (contd)
28
Advisor Best Practices