The tool is powered by a proprietary algorithm from Quantitative Wealth Management Analytics Group, which is used to calculate an optimal product allocation strategy for advisers’ retiring clients.
“We’ve reached a demographic tipping point and are in the midst of one of the largest financial transitions in our history, spurred by the 10,000 boomers a day hitting age 65,” says Jerry Patterson, a senior vice president for retirement and investor services at The Principal. “The paycheck that fueled Boomers’ savings is gone and with that comes an instant shift in mindset.”
Moshe Milevsky, founder of the QWeMA Group and research director at CANNEX, explains that the tool is meant to be simple for advisers to use, and should help demonstrate to clients the importance of creating a sustainable income stream in retirement.
Using the algorithm, the Principal Income Protector takes into account a client’s financial information to develop an asset-allocation strategy that balances guaranteed income and future growth opportunities. The tool also incorporates visualization technology to help advisers demonstrate to clients the importance of building a sustainable income stream in retirement.
Through this approach, an adviser can help ensure clients have enough income in retirement to meet basic expenses, regardless of market performance, while also striving to fund discretionary expenses.