The Lifetime Income Illustration is a mechanism required by the SECURE Act (Setting Every Community Up for Retirement Enhancement Act of 2019). This illustration allows 401(k) plan participants to see an estimate of income they can expect to have in retirement.
The Department of Labor (DOL) has provided guidance for such illustrations which assumes a retirement age of 67 and requires that the amount be stated as a monthly payment as both a single life annuity (individual) and a joint and survivor annuity (married with spouse receiving payments after your death) even if the participant is not married. This information is not intended to be construed as investment advice or a guarantee of return. This is merely an estimate to give you an idea of your potential retirement income in an effort to assist you with your retirement planning.
Investing involves risk and investments may lose value. You should consult a qualified investment professional to determine the appropriate strategy for you.
How are the illustration estimates determined?
A retirement age of 67 is assumed. If you retire earlier than that, your payments will be lower as they will be made over more years. If you retire later, your payments would be higher as they would be made over less years.
The payments assume that your spouse is the same age as you. If you are married and your spouse is younger than you, the actual monthly payments would be lower as it would be expected your spouse would live longer and, therefore, require payments over a longer period of time.
The interest rate used in the calculations may fluctuate over time based on market conditions. The lower the interest rate, the lower your actual payment will be; the higher the interest rate, the higher your payment will be.
Your life expectancy has been determined based on a mortality table provided by the Internal Revenue Service (IRS).
The monthly payments assume that your account is 100% vested and is based on your account balance at the end of the statement period. They also are based on prevailing market conditions. No cost of living adjustment is taken into account.
How often will it be on my statement?
The SECURE Act requires it to be provided at least once per year. However, Guideline may decide to provide it more frequently.
Who should I contact if I have questions?
Please consult with a qualified investment professional if you have any specific questions about your investment strategy or retirement goals.
Investing involves risk and investments may lose value. Investment objectives, risks, charges, and expenses should be considered carefully before investing, and you are advised to consult a qualified financial advisor.