In this webinar, we walk you through how to use the Voyant software to demonstrate the advantages of Long Term Care in annuities.
Transcript
Guaranteed Income Planning
We’ll be working with a couple who are nearing retirement. They’ve expressed concerns about increasing their guaranteed income in retirement and establishing a plan to cover long-term care needs if required.
Looking at their current retirement plan, they have some taxable savings, 401(k) accounts, and estimated Social Security. Currently, the only guaranteed income in their plan is their Social Security.
To explore guaranteed income strategies, we’ll navigate to the Insight section and use the Longevity Risk Annuity Insight. This Insight gives flexibility in modeling transferring assets into a variable annuity.
For this demonstration, we’ll keep it simple:
Withdrawal age: 70
Transfer 50% of Chet’s 401(k) assets into an annuity (approximately $545,000 of the $1.1 million available)
Keep current mortality at age 90
Asset allocation for the annuity remains the same
Advanced settings allow adjustment of fee rates, GMIB interest rates, guaranteed age, and GMIB step-up frequency
Click Get Started to run the simulation. Outputs include:
Estimated Estate Value: At mortality, Chet has approximately $6.14 million in liquid assets, with 50% of assets in the annuity.
Estimated Secure Income: $32,829 per year from the GMIB withdrawal starting at age 70, continuing until age 85.
You can compare this simulation to their current base plan using Compare to Plan. This shows how the annuity increases guaranteed income throughout retirement.
Once satisfied, you can generate a Plan from Results, creating a working “what-if” scenario to use in the client’s chart.
Long-Term Care Planning
Next, we’ll address long-term care needs. Navigate again to the Insight section and run the Long-Term Care (LTC) Insight. For this example, we’ll model:
Client: Chet
Start age: 80
Additional monthly expense: $12,000
Duration: Age 80 until estimated mortality at 90 (10 years)
Advanced options allow you to:
Eliminate other personal expenses
Stop employment income
Sell residences or vacation properties
Click Get Started to run the simulation. Results:
Additional cost to the plan: $3.247 million over 10 years
One year of shortfall due to added expenses
Compared to the guaranteed income plan alone shows the difference in expenses incurred by adding long-term care needs.
To cover this additional need, we can create a long-term care insurance policy:
Go to the Dashboard → Plus Button → Insurance
Enter benefit amount, lifetime coverage (Yes/No), premium, inflation rate, and timing (start now until mortality)
Click Done to save
Re-running the LTC Insight with the insurance policy shows:
Zero years of shortfall
Insurance payouts cover expenses (shown in green in the chart)
Clients do not need to draw from personal assets
This process can be repeated for the spouse to ensure both are covered for unexpected long-term care needs.
I hope this demonstration has helped you understand how to model guaranteed income and long-term care insurance in Voyant to ensure your clients’ financial security.
If you have questions or would like to run a specific scenario with me, reach out to support@planwithvoyant.com and share client access. This will send me a link to your plan so I can review it and help provide answers.
Thank you for attending today’s webinar, and please don’t hesitate to reach out if there’s anything I can do to assist you moving forward.