Interviewer: Are you preparing yourself for the retirement risks zone? If you are, your money may have a very chance of lasting your entire lifetime. But, if you don’t know, anything about the retirement risks zone it could be a different story. Here is what you should know, from a leading expert in this field Dr. Moshe Milevsky to help make sure your harder in the investments won’t run out. Dr. Milevsky what is the retirement risks zone. And why is it important to Canadian investors?
Dr. Moshe Milevsky: The retirement risks zone attempts to describe the time period before retirement and within 5 or 10 years after retirement were a lost in the stock market or a fallen the value of there investments. Can have a disproportionate affect on the amount of income that they can with wrong retirement, it’s a risks zone it’s one of the risks that people face in retirement then they have to manage that risks. I think there is a rumors approach to retirement risks zone they have to start thinking of not just there asset allocation but there product allocation as well. The concept of product allocation is to thinks about more than stocks and bonds in your portfolio. It’s about adding protection and creating income for the rest of your life.
Interviewer: Why is the sequence of returns important? And what is a impact of that on retirement?
Dr. Moshe Milevsky: The concept of sequence of returns tries to capture the counter intuitive affect of investment returns when you are withdrawing money versus when you are accumulating money. When you’re saving money for retirement whether your dollar earns 5% this year and then 10%, our 10% this year and then 5% won’t make a difference on how much is accumulated. But when your withdrawing money the sequence of returns will have an enormous impact on how long the money will last. But all the uncertainty of the future I want to know where money will last as long as we will.
Interviewer: Dr. Milevsky where are Canadian’s lacking are greatest knowledge with investing?
Dr. Moshe Milevsky: I think that the biggest gap and knowledge for Canadians right now is the risks management part of retirement to income planning. Canadian face uncertainty risks about how there investments are going to perform especially when they have start restirring. They face risks about the inflation, what things they’re going to costs in 20 or 30 years. They face risks in terms of how long they are going to need income for. They require a risks management approach and I think that Canadian strengthen there knowledge for this management.
Interviewer: We hear that a Guaranteed Minimum Withdrawal Benefit or GMWB is an option that can provide protection against market downturns; you have still provided growth potential while providing monthly retirement income. Can you tell us about the GMWB?
Dr. Moshe Milevsky: GMWB stands for Guaranteed Minimum Withdrawal Benefit and these products or these writers have become very popular in Japan and in the US within the last five years. Because the population there demographically is likely, older than they are here and they have transition to the income already and bring the period of retirement when you are withdrawing money a GMWB can help to protect income for the rest of your life.
Transcription by:
Scribe4you Transcription Services