1. Northwestern Mutual
Building Retirement Income
with Confidence
Donna M Celmer
September 13 2012
29-5184-18 (0812)
2. Contents
• Importance of Retirement Income Planning
• Six Key Risks of Retirement
• Retirement Income Planning Capabilities
• The Northwestern Mutual Advantage
• How I Can Help
3. Importance of Retirement
Income Planning
• Provide a reliable and consistent stream of income—
regardless of how long you live
• Questions to consider:
– How much income will you need to sustain your lifestyle?
– Where will that income come from?
– What’s the best way to tap this money, and when?
– What are the rules governing retirement plan withdrawals?
4. Six Key Risks of Retirement
1. Longevity
2. Market
3. Inflation and Taxes
4. Health Care Costs
5. Long-Term Care Needs
6. Legacy
Retirement brings new opportunities and challenges.
5. The Northwestern Mutual
Retirement Strategy
Fulfills three primary financial objectives
of living securely in retirement:
1. Provide an optimized flow of income
throughout your lifetime
2. Manage risks to the greatest extent possible
3. Honor your wishes to leave a legacy for your
loved ones or charities.
6. Managing Uncertainty
The Northwestern Mutual Retirement Strategy
• Offensive and defensive approach
• Proprietary, patent-pending planning tool
takes financial modeling to a higher level
• Factors in the key risks that can derail
retirement
• Multiple options to optimize income
throughout your life
• High degree of confidence in the success
of your plan
Northwestern Mutual’s Retirement Strategy helps you
build a retirement income plan with more confidence.
7. Improving Sustainable Income in
Retirement
• Cash Reserve:
– Two years’ living expenses
– Provides monthly paycheck
– Helps meet short-term
income needs
8. Signature Retirement Program
• A simplified way to manage
investments, annuities, and a cash reserve
• Offers the Signature Reserve—a powerful
income management tool with quarterly report
– One account to monitor income and spending needs
– Liquid source of funds to pay ongoing living expenses
– Quarterly report to monitor the program and alert if
cash on hand is too high or too low
The products and services referenced are offered only by appropriately licensed entities and representatives of such entities. The Signature
Retirement Program is an investment management program offered by Northwestern Mutual Wealth Management Company (NMWMC), a
limited purpose federal savings bank that offers investment management and trust services.
9. The Northwestern Mutual Advantage
• Retirement income planning expertise
• Proprietary, patent-pending planning tool
• Comprehensive investment and insurance solutions
• Financial strength
• Policyowner value
• Stability
Our strength is your security.
10. How I Can Help
• A strong team working together to ensure your
insurance and financial needs are met
Jersey Shore Financial Group
1670 Route 34 suite 2
Wall New Jersey 07727
Our goal is to provide you with a complete retirement plan – one that balances
your vision for the future with the need to make your money last.
12. Important Disclosures
Northwestern Mutual is the marketing name that refers to The Northwestern
Mutual Life Insurance Company, Milwaukee, WI (NM) (life, disability income
insurance, annuities) and its subsidiaries and affiliates. Representative is an
Insurance Agent of Northwestern Mutual. Northwestern Long Term Care
Insurance Company, Milwaukee, WI, a subsidiary of NM (long-term care
insurance). Securities offered through Northwestern Mutual Investment
Services, LLC (NMIS), 1-866-664-7737, a subsidiary of NM, member FINRA
and SIPC, and a dually registered broker-dealer and investment advisor.
Advisory services are offered by NMIS and by the Northwestern Mutual
Wealth Management Company, another subsidiary of NM and a limited
purpose federal savings bank. NM is not a registered investment advisor.
Editor's Notes
Retirement income planning is very different from the process of accumulating assets. As a result, the investment and savings strategies you used throughout your career will need to be adjusted as you prepare for and enter retirement. For example, you’ll need to determine how much money you’ll need or want to live on. You’ll need to identify your sources of retirement income – social security, pension benefits and earnings from your 401(k), annuities, and your savings and investments. You’ll need to decide how you’re going to tap this money and when. And finally, you’ll need to understand the rules impacting retirement plan withdrawals so that you take distributions at the right time and in the right way. The stakes are much higher when approaching or living in retirement. Because saving for retirement has a long time horizon, there is time to adjust to market downturns. But if you misunderstand your accounts or their tax treatment and overestimate how much you have to spend during retirement, the effects could be devastating.Not surprisingly, many people find it beneficial to work with a financial professional to help them manage their retirement funds wisely. That’s because the right financial professional can help you create a roadmap to preserve and manage your wealth so that it lasts throughout your life - regardless of how long you live.
I’d like to talk to you about the six key risks that can impact your retirement. While you may be familiar with some of these risks, their impact on your financial security is even greater when you are approaching or entering retirement. That’s why it’s important to make sure your retirement income plan specifically addresses each. Longevityis the risk that you will outlive your assets. The good news is that we’re living longer, healthier lives in retirement. But living longer can be challenging if your income doesn’t last as long as you do. Market is the risk that a stock market decline, especially in the early years of retirement, could significantly reduce the amount of income your savings can provide. Inflation and taxes can also take a bite out of your retirement savings – inflation by reducing your purchasing power, and taxes by reducing your income and leaving you with less money to spend. Health care costs are also an issue for people living on a fixed income. That’s because longer life expectancies, rapidly rising medical and prescription drug costs, and fewer employer-sponsored plans make health care costs a significant risk in retirement. Long-term care needs can also become a key issue if an unexpected or long-term illness hits and requires you to prematurely deplete your savings. Legacy is the final risk I’d like to mention. Experience has shown that, as people age, their desire to leave a financial legacy to loved ones or charities often grows. However, without adequate planning, it can be difficult to balance that desire with income needs in retirement.
Northwestern Mutual takes a different approach to retirement planning.After a lifetime of saving and investing, the goal in retirement is to create a stream of income that supports whatever lifestyle you envision for yourself, for as long as you live. To make your retirement plan work in reality, you first have to make it work on paper. That’s why the first objective is to Create Income for Life. Social Security and pensions are two sources of guaranteed income for retirement; however, they may not be enough to fund a long retirement.Annuities, while often maligned in the press, are another tool that can guarantee income for life. All guarantees in annuities are backed solely by the claims-paying ability of the issuer.But how much of a portfolio should be invested in annuities? The combination of annuities, pensions, and Social Security should at a minimum cover the essential expenses identified in a retirement budget. Investment assets can then be leveraged to cover discretionary expenses and keep pace with inflation.An effective planning strategy combines both defensive and offensive elements, and it’s important to strike the appropriate balance between the two. That’s why objective number two is so important – Protecting Your Assets.In the years leading up to retirement, you’ll want to protect yourself against events that could interfere with your ability to earn income, such as an accident or disability. Disability insurance prevents the premature use of retirement funds to meet current income needs.In retirement, you also need a defensive strategy against the risk of a long-term care event depleting your assets. As I mentioned earlier in today’s presentation, by including funding for long-term care in your retirement plan, you help protect your savings and reduce reliance on others. Once you’ve created a plan to protect your standard of living in retirement, you can move on to other important goals like establishing the distribution of your wealth after you’re gone. That’s why the third objective to creating retirement income security is Leaving a Legacy. Often one’s desire to leave a legacy increases with age. Unfortunately, so does one’s concern regarding running out of money in retirement. For many, permanent life insurance enables you to leave the legacy you desire, while having the freedom to spend the assets your saved for retirement.
[Optional slide]
We draw from a wide range of resourcesto help you put your assets to work so they can generate sustainable income for your retirement. [FR to describe personal/team background and capabilities]
As a Northwestern Mutual Financial Representative, my goal is to arm you with the expertise, resources, and guidance necessaryto help you achieve financial security in retirement. Partnership is a key part of the equation. I’ll work side-by-side with you to help you make informed decisions about your future — to guide you through the maze of options available for retirement. I will partner with you to develop a comprehensive retirement plan designed to help you live through retirement with confidence and financial security.Discover – I will seek to determine your budget/needs, identify your assets, and understand your vision of retirement. In addition, I will help educate you on key concepts used in retirement income and distribution planning.Recommend – Leveraging patent-pending financial planning software, I will analyze your total financial situation and recommend a comprehensive plan that integrates retirement income options, asset allocation models, insurance protection, and investments –all taking into account your specific expected retirement date.Deploy – With a plan in place, I will create a roadmap of key financial activities that need to be implemented over time, including selecting the appropriate products, reallocating assets and investments, setting up a cash reserve, and developing a distribution plan as well as assisting with Social Security timing. Review – You and I will meet regularly to monitor, review and adjust your retirement plan to ensure it remains on track to meet your financial goals. My hope is that this will be the start of a conversation about how we can work together … an ongoing discussion about what matters most in your life, including the enduring dreams and values that define what financial security means to you.
