Retirement planning has always been a daunting challenge.
Traditional Retirement Approach
These conventional retirement strategies often involve a mix of stocks, bonds, and other assets, with a primary focus on building a nest egg over time.
The goal is to accumulate sufficient savings to sustain one's lifestyle during retirement years.
This approach has served many retirees well! But it often lacks the detailed segmentation and risk management found in newer strategies.
Traditional approaches might not consider the specific timing of asset withdrawals or the impact of the market on retirement income. As financial landscapes evolve, it's important to explore many retirement planning methods to protect your future.
With Advanced Time Segmentation® (ATS), managing your retirement income has become more accessible and efficient than ever before.
ATS is a retirement income planning strategy that is ideal for retirees who are looking to mitigate risk and increase the longevity of their asset growth.
ATS takes investment principles that were once exclusive to the ultra-wealthy and makes them available to everyone. This provides a strategic framework for ensuring financial security during retirement.
Understanding Advanced Time Segmentation
ATS at its core is a strategy-driven approach to retirement income planning.
It aims to match an individual's assets with their income liabilities. This builds a personalized strategy that generates inflation-adjusted income while managing investment risk.
ATS is a bucket approach to income in retirement because it separates your portfolio into different buckets, each with its own purpose. This allows you to tailor your investments to your specific needs and risk tolerance at different stages of retirement.
A Strategy-Driven Approach
Traditional retirement planning often involves a mix of investments, which can work for many people. This is commonly done with little regard for the specific period until the assets are needed.
ATS takes a detailed approach by segmenting assets based on their income-generating potential.
This ensures that retirees have a clear roadmap for their income needs over time! ATS creates confidence in their financial future for a minimum of 15 years.
How ATS Works
ATS categorizes assets into five segments, each with a specific purpose and period. Let's take a closer look at each segment:
- Lifetime Income: This segment is designed to provide investors with guaranteed income for life. This is suitable for conservative investors with a long life expectancy.
- Fixed Income: The Fixed Income segment is meant to be spent down over 5 to 7 years. By doing so, it "buys time" for the Balanced segment to potentially grow. This category typically includes safe and sometimes guaranteed investments.
- Balanced: Serving as a bridge between the Income and Growth segments, Balanced investments replenish the Fixed Income segment. As Fixed Income deteriorates, the Balanced segment extends the time available for long-term investments to potentially grow.
- Long-Term Growth: This segment focuses on a 15 to 25-year growth horizon. With the other segments "buying" time, Long-Term Growth investments can remain untouched for many years, compounding gains.
- Income & Growth: The Income & Growth segment aims to provide both income and growth for the portfolio over the long term. It may include alternative investments, supplementing income required from the Lifetime Income and Fixed Income categories.
Exclusive to Cetera Advisors
Advanced Time Segmentation is a unique bucket strategy exclusive to Cetera Financial Group’s financial advisors . This innovative approach takes the guesswork out of retirement income planning! We offer clients a well-structured, time-tested framework to navigate the complexities of retirement finances.
Advanced Time Segmentation® is a game-changer in the world of retirement income planning.
ATS matches assets to income concerns and uses a strategic bucket approach. This provides retirees with the stability they need to enjoy their golden years to the fullest.
Whether you are conservative or just looking to generate asset income, ATS can be tailored to meet your specific retirement goals.
Benefits of ATS
- Flexibility: ATS allows you to adjust your income strategy as your needs change in retirement. For example, if you experience a major expense, such as a medical emergency, you can withdraw money from the Future Income or Long-Term Growth segments to cover your costs.
- Longevity risk protection: ATS can help you protect against longevity risk, which is the risk of outliving your savings. By segmenting your portfolio and investing in a mix of assets, you can generate income for as long as you need it.
To explore your unique benefits with Advanced Time Segmentation®, collaborate with me, Stan J. Malecki, AIF® as your trusted ATS advisor. Learn more by clicking this link. Your retirement journey begins now.
Lifetime Income Segment
The Lifetime Income segment is the first of the Advanced Time Segmentation (ATS) strategy. This segment offers investors an opportunity for financial security during their retirement years. This segment is designed to provide guaranteed income for life.
At the heart of the Lifetime Income segment, you often find a financial instrument known as an annuity. An annuity is essentially a contract between an individual and an insurance company. In exchange for a lump sum payment or a series of payments, the insurance company promises to make regular payments to the individual. Payments typically start at a specified future date, and last for the rest of their life.
Annuities also come in various forms. For the Lifetime Income segment, the focus is usually on immediate or deferred income annuities. Immediate annuities begin payments almost immediately after the lump sum is paid, ensuring a steady stream of income. Deferred income annuities, on the other hand, allow you to defer the income payments to a future date, offering a guaranteed income source later in retirement.
Fixed Income Segment
The Fixed Income segment within Advanced Time Segmentation is a strategic element designed to be gradually spent down over 5 to 7 years. Its primary purpose is to "buy time" for the Balanced Segment to potentially grow. Investments in this category are typically allocated to safe and sometimes guaranteed options, often within a managed-account relationship.
Strategic Spending Down
The Fixed Income segment serves as a buffer to cover immediate income needs during the initial years of retirement. By tapping into this segment, retirees can avoid drawing heavily from their long-term investments during the critical early years of retirement. In the early years, market volatility can have a more significant impact.
Safe and Guaranteed Investments
Within the Fixed Income segment, the emphasis is on safety and reliability. Investments here often include bonds, certificates of deposit (CDs), and money market funds, which are known for their stability. Sometimes, retirees opt for guaranteed income products, such as fixed annuities, to ensure a steady cash flow.
The Balanced Segment serves as a bridge between the Income Segment and the Growth Segments. Its main purpose is to replenish the Fixed Income Segment, extending the time available for your long-term investments to potentially grow. The Balanced Segment is often within a managed-account relationship.
This segment is built to move assets between the other segments. When assets are moved from the Balanced Segment into the Income Segment , this replaces funds in the Fixed Income Segment. This approach ensures that there is a continual source of resources to meet both income and long-term growth.
Managed for Optimal Performance
Balanced Segment investments are carefully selected and managed to strike a balance between risk and potential reward. Portfolios within this segment often include a mix of stocks and bonds. This aims to provide moderate growth potential while maintaining a degree of stability.
Long-Term Growth Segment
The Long-Term Growth offers a powerful vehicle for achieving lasting security during retirement. Tailored to a 15 to 25-year growth horizon, this segment displays the benefits of patience and long-term planning. Similar to the other ATS segments, the Long-Term Growth Segment is typically a managed account, optimizing investments for growth.
The Role of Patience
One of the most powerful attributes of the Long-Term Growth Segment is the virtue of patience. By leaving your investments here to grow over an extended period, you can use the full potential of the markets. This segment allows you to weather market fluctuations and economic cycles while focusing on the long game.
Managed for Growth
Although it's designed for long-term growth, the Long-Term Growth Segment is not a "set it and forget it" strategy. It's carefully managed to ensure that your investments remain aligned with your retirement goals. Asset allocation, diversification, and periodic reviews are part of the management process to optimize performance.
Reaping the Rewards
Over time, the Long-Term Growth Segment has the potential to become the cornerstone of your retirement portfolio, generating returns that can significantly bolster your financial security. It's a testament to the power of strategic, long-term thinking in retirement planning.
Income & Growth Segment
Tailored for long-term success, this segment is designed to provide both income and growth. This offers a balanced approach to financial success during your golden years. As with other ATS segments, the Income & Growth Segment typically involves managed accounts, for performance and stability.
Balancing Income and Growth
Unlike some other segments that are dedicated to either income or growth, the Income & Growth Segment strikes a balance between the two. It is engineered to generate both a consistent income stream and the potential for your investments to grow over time. This balance ensures that you can enjoy the present while securing your future.
Incorporating Alternative Investments
Within the Income & Growth Segment, alternative investments may come into play. These investments often provide unique income opportunities and the potential for strong growth. This diversification can enhance the overall performance of your portfolio.
Supplementing Income Needs
Income generated from the Income & Growth Segment serves a dual purpose. It can supplement income requirements from the Lifetime Income and Fixed Income Categories, ensuring that you have the financial flexibility to enjoy your retirement years fully. This adaptability is a hallmark of the Income & Growth Segment.
Managed for Performance and Stability
As with other segments, the Income & Growth Segment is carefully managed by financial professionals. These professionals guide your investments to align with your long-term goals. They monitor performance and adjust strategies as needed to optimize returns and manage risk.
In the dynamic world of retirement planning, Advanced Time Segmentation (ATS) creates innovation and assurance. It provides a detailed roadmap to financial stability in retirement, addressing its unique challenges.
Now, it's time to take action.
Your retirement journey begins now. Contact me, Stan J. Malecki, AIF®, and let ATS empower you for a confident and prosperous retirement. Your golden years await!
Although it is possible to have guaranteed income for life with a fixed annuity, there is no assurance that this income will keep up with inflation. There is a surrender charge imposed generally during the first 5 to 7 years or during the rate guarantee period. The guarantee of the annuity is backed by the claims paying ability of the issuing insurance company.