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Comparing S2I to Traditional Retirement Planning

 


Topic

Traditional Retirement Planning

Savings2Income Planning
Objective
Attempt to Manage Retirement Savings So That They Don’t Run Out
Create Dependable, Spendable Income
Guaranteed for Life
Strategy to Meet or
Exceed Objectives
Use Fund Selection and Asset Allocation to Improve Returns and Tax Management to Minimize Current Taxes
Manage Success Factors You Control -
Fees, Taxes, Asset Diversification, and Social Security Claiming Decision
Tax Strategy
Manage Taxes through Selection of Securities, and Buy/Sell Allocations. Typically, No Consideration of No-Load Variable Annuities
Invest Most Retirement Savings in
Tax Deferred Accounts. Use No-Load Variable Annuities for Personal Retirement Savings
Tax Reporting
Pay Taxes on Personal Savings Investment Earnings and on Withdrawals from Other Savings
Pay Taxes Only on Retirement Income When Received
Retirement Income
Sources Other Than
Social Security or
Any Pension
Variable Income from Drawdown of Principal, Plus or Minus Current  Investment Earnings on Retirement Savings
Guaranteed Income from Fixed Payout Annuities or Zero Coupon Treasuries that Does Not Depend on Current Market Results
Longevity Management
Conservative Withdrawals of Principal and Investment Earnings to Make Savings Last Longer
Purchase of Payout Annuity to Provide Lifetime Income
Social Security
Claiming Decision
Minor Part of Strategy (if at all)
Key Part of Overall Strategy
How Payout Annuities
are Purchased
One-time Purchase (if at all)
Staged Purchases Over Time to Meet Personal Circumstances and Economic Conditions
Advisory Fees as % of
Retirement Savings
Generally Higher Because of More Complex Approach to Tax and Income Management
Generally Lower Due to Simplified Approach to Tax and Income Management
Situation at
Advanced Age
Withdrawals from Retirement Savings Must Be Managed
Retirement Income is Guaranteed For Life