Helping clients generate income to last throughout retirement may be one
of your biggest opportunities for growth. But it requires a new approach to
managing assets. Nationwide® can help.
The retirement income market has $21 trillion of investable assets.¹ This presents a huge opportunity for advisors since clients will need help planning for retirement income. Investors with a formal plan in place are four times as likely to feel "very secure about their retirement" than those who do not.²And making sure clients feel this way can help you strengthen your business.
Nationwide has studied the work of successful practitioners and leading industry authorities, and conducted its own extensive research and analysis. Through this work, we came to believe that:
Clients should have a high level of confidence that the income they need for necessary living expenses will be there - for life.
How your clients invest for immediate needs in retirement is different than how they invest for future income needs.
Financial risks clients face in retirement impact them differently over time and their income strategy should reflect this.
Our first priority is to ensure an Essential Income amount to cover expenses like food, shelter and medicine - for life. We do this by combining existing income sources (like pensions and Social Security) with an investment that offers guaranteed income, subject to the claims-paying ability of the issuer. Your clients can appreciate having their basic needs taken off the table first.
Once the Essential Income need is addressed, we then work to achieve a Target Income amount - the amount clients prefer to receive so they can live the life they want. To do this, the client's retirement is divided into five-year periods called Life SegmentsSM with an investment assigned to provide income in each segment. The strategy uses more conservative asset allocations in the near-term to help protect against market risk and more growth-oriented asset allocations for later Life Segments to help outpace inflation.
The potential impact of risks changes over
time. Life Segments help you use specific risk
reduction techniques when they're needed
most. Also, a portion of assets are kept liquid
to cover unexpected expenses and to keep
the strategy on track.
This innovative strategy is only part of the comprehensive solution brought
to you by the Retirement Institute. RetireSense is backed by an experienced
and highly-credentialed team of income and retirement planning specialists,
helping you put the strategy into action. They are available to conduct
in-office client seminars, develop customized investment and distribution
strategies and consult on special consideration cases.
¹Cerulli Associates, "Evolution of the Retirement Investor 2015: Insights int o Investor Segmentation and the Retirement Income Landscape."Retirement income households are defined as those with a head of household between the ages of 55 and 69.
²Deloitte, "Meeting the Retirement Challenge: New approaches and solutions for the financial services industry." 2013.
³LIMRA, "Retirement Confidence and Security: Experiences, Expectations and Benefits of Planning." 2014.
RetireSense is a retirement income strategy developed by Nationwide. The strategy is customized for the client through the use of the R-IncomeAnalyzer®, a proprietary investment analysis tool that runs simulations, calculates the amount of money suggested for each investment and performs a statistical analysis that presents the likelihood of meeting specific income needs in retirement if certain types of suggested investments are made. This analysis is designed to enhance the investor's evaluation and understanding of how the RetireSense strategy generates retirement income as well as the potential risks and returns associated with investment choices. The information generated by the Analyzer regarding the likelihood of various investment outcomes is hypothetical in nature, does not reflect actual investment results and is not a guarantee of future results.
R-IncomeAnalyzer and Life Segments are service marks of Nationwide Life Insurance Company. Nationwide, the Nationwide N and Eagle, Nationwide
Retirement Institute and RetireSense are service marks of Nationwide Mutual Insurance Company. © 2015 Nationwide