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Get Your Time Back with an Efficient RMD

Mike Dickson, Ph.D.
Mike Dickson, Ph.D.

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Thousands of baby boomers are retiring or are already in their golden years, bringing billions of dollars out of retirement accounts as America’s second-largest generation greets the IRS’s required minimum distribution age (RMD). Managing RMD withdrawals can be complex and time-consuming—but it doesn’t have to be. Implementing an efficient RMD strategy can help safeguard your clients from costly penalties, enhance their retirement income planning experience, and reduce the administrative burden on your practice.

Consider Horizon’s Real Spend® distribution strategy

Real Spend® is a retirement income strategy available as a managed account. The periodic withdrawal aspect of the strategy aims to slow the exit of assets due to mandatory RMDs.

Real Spend consists of three main components:

  • Investment Portion: Aims to exceed or keep pace with inflation and generate sufficient returns
  • Risk Mitigation: Designed to help protect retirement capital against catastrophic losses
  • Spending Reserve: Offers a multi-year reserve of liquid assets
RS Nest Egg

Inside a Real Spend® nest egg

FOR ILLUSTRATIVE PURPOSES ONLY

 

Implementing Real Spend® retirement income strategies to address RMD needs

Real Spend’s systematic approach can help create efficiency for you and your clients in two significant ways:

READY LIQUIDITY

Each Real Spend® model features a dedicated spending reserve that aims to hold approximately three years’ worth of income distribution needs in liquid, cash-like holdings. Clients can access these funds whenever necessary – for example, to satisfy their RMDs.

STRUCTURE

The allocation of Horizon’s Real Spend® strategy supports a targeted withdrawal amount each year, eliminating significant time and effort spent preparing to meet clients’ spending requirements, and may help avoid selling retirement holdings at inopportune times to meet withdrawal requirements.

 

Real Spend® 5% Example

Real Spend® is available in five portfolio strategies designed to support distribution rates between 3% and 7% annually through risk-managed exposure to global equity markets.

REAL SPEND® PORTFOLIOS ARE DESIGNED TO PROVIDE:

  • Spending reserves replenished by portfolio gains
  • Opportunity for portfolio growth through exposure to global equities
  • Risk mitigation seeking to avoid catastrophic loss
FOR ILLUSTRATIVE PURPOSES ONLY
The investments recommended by Horizon are not guaranteed. The charts represent an approximate percentage of investment choices for each model and should not be considered a guaranteed or fixed percentage.
The Real Spend® retirement income strategy is NOT A GUARANTEE against market loss and there is no guarantee that the Real Spend® strategy chosen by an investor will lead to successful investment outcomes for part of, or for the entirety of an investor’s retirement. This strategy is not an insurance product with payments guaranteed. It is a strategy that invests in marketable securities, any of which will fluctuate in value. Before investing, consider the investment objectives, risks, charges, and expenses of the strategy.
Keep in mind investing involves risk. There is a possibility of outliving the assets if market performance is lower than forecasts used in planning, or if longevity is longer than anticipated.
Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. Strategies are subject to risks including general market risk and risks related to economic conditions. Underlying investments fluctuate in price and may be sold at a price lower than the purchase price resulting in a loss of principal. The underlying investments are neither FDIC insured nor guaranteed by the U.S. Government. There may be economic times when all investments are unfavorable and depreciate in value. Clients may lose money.
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