make it last · retirement savings. the risk of retirees outliving their portfolio is especially a...

Make it lastPLAN TO SPEND YOUR RETIREMENT SAVINGS WISELY

John Hancock Retirement Plan Services LLC is also referred to as "John Hancock".

Make it Last | page 2

10,000Retiring soon

RETIRING EVERY DAY

http://www.washingtonpost.com/blogs/fact-checker/wp/2014/07/24/do-10000-baby-boomers-retire-every-day/


Two phases

Accumulation Income Replacement


Things to Consider

Find Your Numbers

Drawdown Strategies

Continued Investing

Example

Next Steps

Agenda


Success = Not over living your funds

Unknowns− How long you will live− Inflation− Investment returns− Healthcare expenses− Living expenses

Make informed decisions

Things to consider

http://ssa.gov/planners/lifeexpectancy.html


Source: 2012 Individual Annuity Mortality Basic Tables—Society of Actuaries, 2000–2004 Reports. © 2014 Morningstar. All Rights Reserved.

Retirees Should Plan for a Long RetirementProbability of a 65-year-old living to various ages

Did you know…

Longevity risk is the possibility that a person will outlive his or her retirement savings.

The risk of retirees outliving their portfolio is especially a concern for those taking advantage of early retirement or those who have a family history of longevity.

For a couple aged 65, there is a 25% chance that one of them will live to age 96—a 31 year retirement time horizon!

0

25

50

75

100%

65 70 75 80 85 90 95 100 105

• Male

80 87

86 92

92 96

• Female• At least one spouse

Age

Prob

abili

ty

82

88

94

Living longer: Life expectancy


Planning

Find your numbers

What you will need


Spending habits

Fixed

Flexible

Discretionary


Poll

How do you picture your retirement?


Spend time with family

Consider your retirement expenses

Do what you want

Hobbies Volunteer work

Travel Snow bird


Spending in retirement

High

Low

Early Late

SPE

ND

ING

RETIREMENT YEARS

Us News, August 22 2014; 3 Stages if Saving and Spending in Retirement.


How will you pay for health care? $326,000 for a retired couple*− Living to average life expectancy

Health care

* 2014, Employee Benefits Research Institute.

Medicare Medicaid

Prescriptions Uncovered expenses


Hospital (part A)

Medical (part B)

Medicare Advantage (part C)

Prescription (part D)*

Medigap

Medicare

Source: medicare.gov, What Medicare Covers.

* You can't have prescription drug coverage through both a Medicare Advantage Plan and a Medicare Prescription Drug Plan. If you're in a Medicare Advantage Plan that includes drug coverage and you join a Medicare Prescription Drug Plan, you'll be disenrolled from your Medicare Advantage Plan and returned to Original Medicare.

Medicare.gov

1-800-MEDICARE (1-800-633-4227)


Planning

Find your numbers

Where your $ will come from


Social Security

1 https://www.ssa.gov/news/press/basicfact.htmlv, June 2015.2 https://www.ssa.gov/OACT/COLA/examplemax.html

An estimated 165 million workers are

covered under Social Security1

$1,335 average monthlybenefit1

$2,452max

monthlybenefit2

A B C


Amount depends on age

Social Security

https://www.socialsecurity.gov/OACT/ProgData/ar_drc.htmlNasdaq, Budget Kills 'File and Suspend' Strategy to Maximize Social Security.

Early AGE 62

75%

On Time AGE 66

100%

Delay AGE 70

132%

2016 - No longer allowed to file and suspend


Source: Social Security Administration, Income of the Aged Chartbook, 2014.

Social Security35.3%

Earnings33.9%

Pensions17.1%

Asset Income10.5%

Other3.0%

Social Security


Retirement and Benefit Plans− 401(k)− Pension− Roth− IRA

Bank accounts

Insurance policies

Personal assets− Cars, antiques, jewelry

Real estate− Sell or downsize

Retirement savings


Social interaction

Delay Social Security

Help with expenses

Have a purpose− Volunteer

Part-time work


Draw down strategies

Ensure you have enoughto last, without leaving

too much behind


Common strategiesDRAWDOWN

Fixed amount

Varying amount

Investment based

CBS Moneywatch, What’s the best retirement drawdown strategy, July 2014


Year

$20,400

Year

$20,8083

4% Rule

Common strategiesFIXED AMOUNT

Year

Savings = $500,000

1 2Based on a portfolio of 60% large-cap stocks and 40% bonds

http://www.blackrock.com/investing/planning/retirement/income/withdrawal-strategies/rethink-4-withdrawal-rule

There is no guarantee that any investment strategy will achieve its objectives.

$20,000


Common strategiesVARIABLE AMOUNT

Year

Portfolio $500,000Total – $25,000

5%

1Year

Portfolio $550,000Total – $33,000

2Year

Portfolio 450,000Total – $22,500

3

Variable Percentage

6% 5%



Years

Bonds

Years

Equity/Stocks

Common strategiesINVESTMENT BASED

Years

Cash

Bucket 1

1 3 10+

Asset allocation strategy

Bucket 2 Bucket 3

4 9



Common strategies

Tax considerations

Required Minimum Distributions (RMDs) begin at age 70½

Taxable accounts

IRA

Roth IRA

Kiplinger, How 6 Types of Retirement Income Are Taxed, Jan. 2015.


Flexible strategyCUSTOMIZE


No “Rule”

Adjustments− Increase - positive market− Decrease - down market

Combination of methods


Other considerations

Annuities

Longevity Insurance

Reverse Mortgage

Downsize home− Sell for $300,000 and spend $150,000

− Research cost of living if moving to new location

Inheritance


Emergency fund

Easy access Avoid credit Unexpected expenses


Example:Dave and Mary


Meet Dave

All scenarios shown are hypothetical in nature. The scenarios are illustrative and only intended to demonstrate the various strategies.


Meet Dave

Fixed Dollar Strategy

$500,000− Expect to have 25 years in retirement− $20,000 per year− $1,666 per month


Dave

Hypothetical example for illustrative purposes only. 1 Tax rules vary based on the type of annuity

Yearly Income Needed in Retirement

$50,000

Retirement Plan $20,000

Social Security $16,020

Pension $14,000

Roth IRA $0

Annuity1 $0


Meet Mary

All scenarios shown are hypothetical in nature The scenarios are illustrative and only intended to demonstrate the various strategies.


Mary

Hypothetical example for illustrative purposes only.1 Tax rules vary based on the type of annuity

Yearly Income Needed in Retirement

$50,000

Retirement Plan $20,000

Social Security $0

Pension $14,000

Roth IRA $1,000

Annuity1 $5,000

Work Part-Time $10,000


What’s next?

ContactJohn HancockRetirement

Plan Services mylife.jhrps.comor 800.294.3575*

and download the app

Create a strategy

Calculatehow much you will need for retirement

Make a plan Reviewwhere your retirement income will come from

* For your protection, all calls to our representatives are recorded.

1 2 3 4 5


Additional resources

Social Security− ssa.gov or 1-800-772-1213

Medicare − medicare.gov or 1-800-MEDICARE (1-800-633-4227)

Certified Financial Planner− cfp.net− finra.org− fee-based or commission-based

Required Minimum Distributions − https://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Required-

Minimum-Distributions

John Hancock Retirement Plan Services − mylife.jhrps.com or 800.294.3575


Thank you

IMPORTANT INFORMATION

A fund’s investment objectives, risks, charges and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact John Hancock Retirement Plan Services LLC at 800.294.3575 or visit our website at mylife.jhrps.com. Please read the prospectus carefully before investing or sending money. Prospectus may only be available in English.

The content of this document is for general information only and is believed to be accurate and reliable as of posting date but may be subject to change. John Hancock does not provide investment, tax, or legal advice. Please consult your own independent advisor as to any investment, tax, or legal statements made herein.

John Hancock Retirement Plan Services, LLC offers plan administrative services and service programs through which a sponsor or administrator of a plan may invest in various investment options on behalf of plan participants. These investment options have not been individually selected by John Hancock Retirement Plan Services, LLC. John Hancock Trust Company, LLC provides trust and custodial services to such plans.

NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED | NOT INSURED BY ANY GOVERNMENT AGENCY

© 2015 All rights reserved.

S-P28814-GE 11/15-28814

RS111015261152

make it last · retirement savings. the risk of retirees outliving their portfolio is especially a...

Documents