When it comes to providing a sustainable withdrawal rate, treating GIfL as a guaranteed asset class shows that blending works.
The risk dynamic is shifted, allowing the retiree to chase after growth with the remaining equity. Not only does it meet the sustainable withdrawal rate conundrum, but it also provides a measure of capacity for loss protection.
It is inevitable that there will be a market correction at some point, and blending in this way will help to mitigate some of the downside, while providing longevity hedging.
Tony Clark, Proposition Marketing Manager.
*Based on an individual with a fund value of £100,000. An annuity being payable monthly in advance, no dependant’s pension, no escalation, 10 year guarantee period, no value protection. Rates cover December 2017 to May 2018
Healthy Life - post code only. Respiratory - COPD diagnosed 13 years ago, lung function minimally impaired, hospitalised two years ago, takes one medication. Diabetes Type 2 - diagnosed nine years ago, one medication taken daily, HbA1c readings provided, monitors blood glucose levels once a day.
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