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Delaying saving for retirement could cost in the long run

Retirement planning will be crucial to your clients if they are to maintain their current standard of living in the future. However, delaying the retirement planning process can have a dramatic effect.

Clients who delay could miss out by failing to get an early start in building their nest egg. The longer they delay, the more likely the need for higher premiums to achieve their target retirement fund.


The charts below illustrate this point using Quantum with an assumed fund growth rate of 6% per year. In practice fund growth is prone to variance and future performance cannot be predicted.


Chart A - monthly premiums required

Chart A shows the monthly premiums required to achieve a retirement fund of USD 1 million at age 65


monthly premiums required

The assumed growth rate used to calculate the figures shown above are after the deduction of the contract charge (1.5% per year deducted monthly) and any external fund management charges.


The figures provided in Chart A and Chart B assume that no withdrawals have been taken and premiums are paid throughout the selected premium terms.


Remember that the effects of inflation will reduce the purchasing power of your client's investment over time.


Chart B - total premiums required

Chart B shows the total premiums payable to achieve a retirement fund of USD 1 million at age 65


total premiums required

The assumed growth rate used to calculate the figures shown above are after the deduction of the contract charge (1.5% per year deducted monthly) and any external fund management charges.


The figures provided in Chart A and Chart B assume that no withdrawals have been taken and premiums are paid throughout the selected premium terms.


Remember that the effects of inflation will reduce the purchasing power of your client's investment over time.


The message is simple.....the sooner your clients start saving for their retirement, the better.