October 24, 2011

Putnam Introduces Funds, Tool to Help Retirees Manage Income

New funds and tool allow accommodation of retirement complexities

Putnam Investments announced Monday the official launch of its Retirement Income Lifestyle Funds, a suite of three income-oriented mutual funds, along with a retirement income analysis tool that can be used with the funds to make sense of the complexities presented by the savings withdrawal phase of retirement.

Putnam, which in September unveiled a redesigned website for advisors, complete with social media tools and portfolio modeling, has been focusing on retirement as an area that presents a “multitrillion dollar opportunity” to advisors as boomers leave the workforce. Last week, Putnam CEO Bob Reynolds (left), gave the opening keynote speech at the 4th annual Retirement Income Symposium, hosted by the Investment Advisor Group of Summit Business Media (of which AdvisorOne is a part). In that speech, he spoke about the challenges of and potential solutions for retirement income planning.

This latest offering is meant to help financial advisors deal with clients’ retirement challenges by giving them the ability to execute a variety of income strategies for those clients’ retirement years, including income generation while waiting for Social Security benefits to kick in, creation of a sustainable stream of lifetime income based on expected longevity and estimation of related assets that can be earmarked for heirs.

The retirement income analysis tool generates customized lifetime income projections, utilizing scenario-planning based on a number of determining factors—income needs, life expectancy, risk tolerance and other key financial variables. The tool, when used by advisors, will then suggest possible investment solutions, varying in risk/return characteristics, from the new Putnam Retirement Income Lifestyle Funds suite.

The funds, Putnam Retirement Income Fund Lifestyle 1 (PRMAX), a conservative fund; Putnam Retirement Income Fund Lifestyle 2 (PRYAX), a moderate fund; and Putnam Retirement Income Fund Lifestyle 3 (PISFX), an aggressive fund, are intended for investors who are already in retirement, who expect to retire soon or who otherwise plan to begin withdrawing their invested funds in the near future. They include a mix of domestic and international equities, convertible and fixed-income securities, as well as the Putnam Absolute Return Funds, which provide volatility management throughout the drawdown phase.

PRMAX is the new name of the Putnam RetirementReady Maturity Fund; PRYAX is a new fund; and PISFX is the new name of the Putnam Income Strategies Fund.

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