Meeting Your Needs in Retirement

8/2/2019 Meeting Your Needs in Retirement

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Meeting Your Income Needs in RetirementAviva MultiChoice Fixed Indexed Annuities

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Like other aspects of your life, your financial life tends to progress through

certain phases or stages.1 In fact, most people find themselves living in one of

two key stages: the Accumulation Stage or the Distribution Stage.

The Accum ulat ion St age can be thought of as the saving phaseof your financial life. During this time, youll often focus on savingenough money for retirement.

During retirement, its likely youll transition to the Distr ibut ionStage. In some ways, you could call this the spending phase ofyour financial life, or a time to determine how much money you cansafely withdraw from your assets to meet your retirement goals.

2

Are you living in the Accumulation Stage,Distribution Stage, or somewhere in between?

Stage 1

Stage 2


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Protect yourself from the unexpected by settingup emergency funds and purchasing anadequate mix of insurance to cover life,disability, health, property and casualty, and

vehicles.

Provide for yourself and your family (education,home, cars, and other needs) without placingundue stress on your resources or causing afinancial crisis.

Exercise 1:

Right now , I w ould like to:

Create an emergency fund

Add more money to my emergency fund

Re-evaluate my life insurance needs

Plan ahead for the possibility of needinglong-term care

____________________________________________________________________

__________________________________

__________________________________

__________________________________

__________________________________

For me, it s import ant t o:

Care for an aging family member

Support an adult child

Pay college expenses

Pay off my current home

Purchase a new home

Downsize

Move to __________________________

Plan ahead to meet routine monthlyexpenses

__________________________________

__________________________________

__________________________________

At this stage of your l if e, w hat are your goals?Most people set a variety of goals duringthe Accumulation Stage and Distribution Stage of their financial lives. Yet, there are certain goals that are

common to most people throughout the financial life cycle.2

What are your goals in each of these five categories? Check each box that applies to you.Fill in the blanks with additional goals that are important to you.

2 Gail M. Gordon, The Life Cycle of Financial Planning , University of Wyoming Cooperative Extension Service, 2001.

Defi ne your retirement goals and lifestyle expectations.

Goal 1: Prot ect Agai nst Risks Goal 2: Ensure Fin ancial Secur it y

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Go beyond the basics of ensuring financial security to obtain some of the added benefits of life suchas vacations, club memberships, entertainment, relaxation, and time away from work to pursue otherinterests.

Make an orderly transition and distribution ofyour assets and overall wealth. Please consult atax professional and/or attorney to discuss yourgoals in this category.

Create a financially independent, comfortable

retirement that can provide a standard of livingthats consistent with what you enjoyed duringyour working years.

For me, it s import ant t o:

Inventory my assets

Write a will

Update my will

Create an estate plan

Update my estate plan

Evaluate my beneficiary designations

Explore charitable giving options

_________________________________

_________________________________

_________________________________

_________________________________

I think it w ould be helpful t o:

Define my lifestyle expectations inretirement

Select a target retirement age

Estimate retirement expenses

Evaluate retirement income sources

Determine an effective incomewithdrawal rate

Create a retirement income plan

__________________________________

__________________________________

__________________________________

Goal 3: Develop a Com f ort able St andard of Livin g

Goal 5: M anage You r Est ateGoal 4: Create a Com f ort ableRetirement

I w ould like to:

Travel in the United States

Travel abroad

Travel to __________________________

Join ______________________________

Purchase an additional home

Purchase a motor home

Buy another car

Begin a new career

Attend college

Pursue my interest in________________

__________________________________

__________________________________

__________________________________

__________________________________

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Many people have not est imated the amount of income theyll need to coverretirement expenses. According to the 2008 Retirement Confidence Survey, fewer than half ofworkers (47 percent) have tried to calculate how much money they will need for a comfortable retirement.

However, estimating your retirement expenses can help you make important decisions.

The same 2008 report revealed that when individuals calculated a goal, 44 percent changed their

retirement plans and 59 percent started saving more.3

Estimate your retirement expenses.

Youll need approximately 80-90 percent of your pre-retirementincome to cover expenses.

At the beginning of retirement, most peoples monthly income willexceed their expenses.

After a decade or so, expenses begin to exceed monthly income.

On average, 20 percent of retiree income will be spent on healthcare.

Qui ck Fact s Ab ou t Ret irement Exp enses4

6

Exercise 2:

3 Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., 2008 Retirement Confidence Survey.

4 U.S. Department of Labor, Taking The Mystery out of Retirement Planning, 2008.


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How much income do you need to coverretirement expenses?Use this worksheet to help you estimate your monthly and annual expenses in retirement.

Housing...........................................................................................

Utilities..............................................................................................

Auto/Transportation Costs.................................................................

Food/Personal Care.............................................................................

Clothing............................................................................................

Hobbies/Entertainment......................................................................Debt Replacement (other than mortgage)............................................

Other................................................................................................

Total Mont hly Expenses.................................................................

M ont hl y Expenses in Ret irem ent

Annual Cost of Monthly Spending..................................................

Gifts...................................................................................................

Vacation/Travel..............................................................................

Health Insurance Premiums..............................................................

Medical Expenses (not covered by insurance)......................................

Other Insurance Premiums (auto, home, etc.)...................................

Other.................................................................................................

Tot al A nnual Exp enses............................................................

An nual Expenses in Ret irement

7

$

$


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Inventoryyour sources of guaranteed retirement income.

What are your sources of guaranteed ret irement income? In addition to estimating yourretirement expenses, its also important to inventory your anticipated guaranteed retirement income.

Common sources include Social Security benefits, pensions, and annuities.

Social Security Benefits Nearly 70 percent of Americans apply for Social Security

benefits as soon as they become eligible. However, the amount of your Social Security benefit

will go up the older you are when you begin taking it.5 To calculate your Social Security

benefits, go to www.ssa.gov/planners/calculators.htm

Pensions A traditional defined benefit plan is a pension. The payout to the worker is

based on a defined formula upon retirement, either a percentage of earnings or a fixed dollar

amount per month. In 1985, 89% of the Fortune 100 offered a traditional defined benefit

plan to new employees, compared with just 28% in 2007.6

Annuities There are different kinds of annuities. No matter what the type, an

annuity represents a contract between a buyer and an insurance company. In exchange for

the premiums the buyer pays to purchase an annuity contract, the insurance company agrees

to provide regular income payments over a specified period of time. An annuity contract mayinclude other benefits such as tax deferral, growth potential, living benefits, and death

benefits. These benefits may vary from annuity to annuity; each offers a different method for

calculating interest and creating future value.

Quick Fact s Abo ut Guarant eed Reti rem ent Incom e

Exercise 3:


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What are your sources of guaranteed

ret irement income?Use this worksheet to inventory the amount of income you expect to receive on a regular basisthroughout retirement.

Social Security...............................................................................

Pension.........................................................................................

Annuities.......................................................................................

Other (CDs, company-sponsored plans, IRAs, personal savings)................................

TotalAnnual Income......................................................................

Sources of Annual Guarant eed Reti rement Incom e

How does your amount of guaranteedincome compare to your est imated

retirement expenses?

$

5 www.ssa.gov6 Watson Wyatt, Large Employers Slow Changes to Retirement Plans, Watson Wyatt Finds, Press Release, May 22, 2008.


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One of your choices forguaranteed ret irementincome is a fixed indexed

annuity.

Today, you have many choices for saving money forretirement. One of your choices for guaranteedretirement income is an Aviva MultiChoice FixedIndexed Annuity. A fixed indexed annuity is atax-deferred insurance product that offers severalindexed interest-crediting strategies designedspecifically to help you meet your long-termretirement income needs.

When included as part of your overall retirement

plan, a fixed indexed annuity can provide you:

The potential to earn interest creditsbased on changes in external marketindices

Tax-deferred interest accumulation7

A death benefit for your beneficiaries

Principal protection

The ability to create an income streamyou can never outlive

The security of a minimum guaranteedcontract value

Options for when you decide to withdrawsome or all of your money8

7 Tax-deferral offers no addit ional value if an annuity is used to fund an IRA; purchase anannuity for reasons other than tax-deferral benefits beyond those inherently provided byan IRA, such as a lifetime income and a death benefit.

8 Taxable amounts wit hdrawn prior to 59 1/2 may be subject to a 10% IRS penalty.Withdrawals in excess of the free amount are not credited with index interest for thatterm, may be subject to Withdrawal Charges and a Market Value Adjustment and mayresult in the loss of principal if taken during the first 5-10 years of the Contract.

Indexed annuit ies are not registered securit ies or stock market investments and do notdirectly participate in any stock or equity investments.


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Is an Aviva MultiChoice Fixed Indexed Annuity right for you?

Working with your Aviva representative

can help you determine if an Aviva

MultiChoice Fixed Indexed Annuity is

right for you whether youre living in

the Accumulation Stage, Distribution

Stage, or somewhere in between.

Contact your Aviva representat ive

for more information today.


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Who i s Aviv a?

Aviva Life and Annuity Company is a wholly owned subsidiary of Aviva plc. Aviva plc is the fifth-largestinsurance group in the world9, with a strong history dating back over 300 years. Aviva plc has 57,000

employees and 45 million customers worldwide. In the United States, Aviva is the number one providerof indexed life insurance and the number one provider of fixed indexed annuities.10

Aviva plc has been known as a progressive company for over 300 years with a reputation for creatingbetter ways to understand and meet peoples needs. Its this insight, this ability to think beyond theimmediate and the everyday that makes us who we are.

The guarantees provided by annuities and other insurance products are subject to the stability and claims-paying ability ofAviva Life and Annuity Company. AvivaMultiChoice Fixed Indexed Annuity Income Series [forms MCIP (06/06), MCI10 (06/06),

MCI7 (06/06), MCI5 (06/06), MCIR (10/07), MCIX (01/08) or state variation] is issued by Aviva Life and Annuity Company, DesMoines, IA. Product features, l imitations, and availability vary by State.

We recommend learning about all product options available to you to find ones that best suit your long-term needs.

This brochure contains highlights onlyplease refer to your Annuity Contract for a full explanation of this product and anycharges or limitations. Neither Aviva Life and Annuity Company nor its representatives offer legal or tax advice. You should

consult your own personal attorney and/or tax advisor regarding any legal or tax matters.

9 Based on gross worldwide premiums for the year ended 31 December 200710 Source: Advantage Index Product Sales Report - 2nd Quarter 2008, Annuityspecs.com

1-800-255-2405

www.avivausa.com2008 Aviva Lif e and Annuit y CompanyAll Rights Reserved.

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