PLEASE REVIEW THE FOLLOWING FOR IMPORTANT INFORMATION REGARDING ASSUMPTIONS, LIMITATIONS, AND RISKS ASSOCIATED WITH USE OF THE RETIREMENT PLANNING TOOL.
The Retirement Planning Tool is for educational use only. The projections or other information generated by the Retirement Planning Tool regarding the likelihood of various investment outcomes are hypothetical in nature, and do not reflect actual anticipated results. Keep in mind that investing involves risk. The value of your investments will fluctuate over time, and you may gain or lose money. Diversification and asset allocation do not ensure a profit or guarantee against loss.
The primary objective of the Retirement Planning Tool ist o help provide education on how retirement savings coupled with other sources of predictable income could affect the estimated amount of available assets and composition of income in retirement. Through the basic inputs, we gather general information about a hypothetical scenario and roughly estimate how that scenario may perform over time. The Retirement Planning Tool results are based on the personal and financial information that you provide. We have no responsibility to investigate the accuracy or completeness of such information.The Retirement Planning Tool will not consider any information requested of but not furnished by you. You are responsible for providing true, accurate, and complete information. Assumptions are subject to change based on applicable law or to reflect newly available data relevant to the calculations.
Your current balance, income, contribution level, and other assets all affect your potential success in reaching your retirement goals. Generally, the Retirement Planning Tool finds the strategy with the lowest risk that results in having enough savings to match your expected retirement expenses. The Retirement Planning Tool will recommend a more aggressive investment strategy if a particular investment strategy is forecasted to fall short of your goal.
The Retirement Planning Tool is not a substitute for a retirement income plan. The Retirement Planning Tool results regarding hypothetical withdrawal amounts are determined by a set of growth rates for various time horizons. These rates have been generated through simulations based on historical market returns that a portfolio might experience, although the market's past performance does not predict how it will perform in the future. General descriptions of each of the five available investment strategies appear below. Expenses are assumed to increase at an annual inflation rate of 2% based on the U.S. Federal Reserve’s targeted rate of inflation. The actual inflation rate for any given year could potentially be drastically different than the targeted rate.
The Retirement Planning Tool does not support all types of income or assets. Income sources included in guaranteed income may include Social Security and pensions. The Retirement Planning Tool assumes that these sources will continue at the specified level for the duration of the hypothetical plan. However, each source of income is subject to unique risks and limitations. Outside assets receive a discounted rate of return due to the underlying assumption that they are not professionally managed.
TheRetirement Planning Tools uses risk and return rates in its calculations that are provided by Wilshire Associates, LLC. Social Security bend points, maximum earnings, and life expectancy values are based on the information provided by the Social Security Administration and set forth under the Social SecurityOASDI Trustee Report, as updated from time to time. When providing estimates for future social security benefits: (a) bend point values are used to determine which social security tax rates are applied to the correlating earned income amounts; (b) maximum earnings values are used to determine the maximum amount of income that qualifies for social security taxation each year; and (c)life expectancy values are used to estimate participant life expectancy when calculating future projections. Social Security benefits are subject to current federal law, which Congress has made changes to in the past and can do so at any time. The law governing Social Security benefit amounts may change because, in the future, the payroll taxes collected may not be enough to pay 100% of scheduled benefits. Future Capital cannot guarantee any results shown in these examples. Visit www.ssa.gov for additional information on SocialSecurity benefits eligibility and rules. Pension payments are subject to the specific structure of the pension and the claims-paying ability of the employee’s employer, unless the employer has transferred the liability to a third-party insurance company.
INVESTMENT STRATEGIES
In general, the investment lifecycle can be divided into one of two phases: the accumulation phase and decumulation phase. The accumulation phase begins when an investor enters the workforce, typically in one’s early 20s, and begins saving and investing toward retirement. The accumulation phase ends and the decumulation phase begins when one enters retirement, typically around age 65, thereafter the individual begins spending down their retirement savings. During the accumulation phase, an investor is primarily concerned with capital appreciation, whereby in the decumulation phase an investor is primarily concerned with retirement income and capital preservation. As you age, we adjust your portfolio creating a “glide path” that becomes more conservative as you near retirement. Descriptions of each of the five available investment strategies are as follows:
Conservative: This investment strategy seeks to minimize fluctuations in market values consistent with a below-average level of risk and takes an income-oriented approach with some capital appreciation potential. Investors should expect low volatility and a below-average market return.
ModerateConservative: This investment strategy seeks income and the potential for capital appreciation, with a slight priority on income, consistent with a below-average level of risk. Investors should expect moderate fluctuations in market values.
Moderate: This investment strategy seeks income and the potential for capital appreciation with a slight priority on capital appreciation, consistent with a moderate level of risk. Investors should expect moderate fluctuations in market values.
ModerateAggressive: This investment strategy seeks a preference for portfolio growth and income consistent with an above-average level of risk. Investors should expect more significant fluctuations in market values.
Aggressive: This investment strategy seeks aggressive growth through a diversified asset allocation strategy consistent with an above-average level of risk. Investors should expect wide fluctuations in market value, especially over the short term.