Putnam Investments has announced the introduction of a
ground-breaking new approach that will change the lens through
which investors view their current retirement savings activities,
placing much greater focus on future income needs and shortfall
planning. Putnam’s Lifetime Income SM Analysis Tool is designed to
help 401(k) plan participants project how much income their current
retirement savings may generate in retirement compared to what they
may need, and then offer actionable next steps.
The delivery method for helping investors to translate their
current and future retirement savings efforts into income needs and
ramifications is the Putnam Lifetime IncomeSM Analysis Tool, which will enable plan
participants to model how much income their savings might generate
in retirement, and determine if they are on track to have
sufficient income to maintain their current lifestyle once they
stop working.
The Putnam Lifetime Income Analysis Tool and a new participant
Web site were unveiled yesterday at a Retirement Income Summit
sponsored by Putnam Investments in New York. The event, attended by
financial advisors, retirement plan sponsors and consultants,
focused on the importance for investors to have greater awareness
of how much income they are likely to generate – and need — in
retirement.
Speaking at yesterday’s event, Putnam President and Chief
Executive Officer Robert L. Reynolds said, “Many investors focus
only on accumulating assets in their retirement savings plan, when
the important thing is how much income their plan will produce in
retirement. One of the best measures of success for any retirement
system is its ability to reliably replace — for life — the income
people made while working.”
Reynolds continued, “We are seeking to reframe the conventional
mindset from inputs to outcomes – from accumulating assets to
measuring the income-generating potential of a retirement plan. We
are not only offering a new lens through which to view retirement
savings, but also providing real solutions that every investor can
consider in working towards a secure retirement.”
Initially available only to Putnam’s plan sponsor clients and
their employee plan participants, the Lifetime Income Analysis Tool
also will help individuals and their advisors plan for retirement
by factoring in the impact of remaining life expectancy as well as
potential income from outside sources, such as Social Security and
IRA account balances. The tool can help provide suggestions on how
investors may generate any additional income needed in
retirement.
One of the primary ways Putnam will assist plan sponsors and
their 401(k) participants to focus on their income potential in
retirement is through Putnam’s new Web site that has turned the
traditional 401(k) participant site inside out. On other sites,
planning tools that lead to income analyses are usually hidden
behind the home page and require accessing multiple pages to get to
a result. Consequently, many participants never find the tools,
never use them, never finish completing them or never go back to
them. On Putnam’s site, the income planning view always remains in
front of participants.
“It has become increasingly clear that Americans need to save
more for retirement and that providers and plan sponsors need to
help their participants specifically understand their future income
requirements — and try to make it easier for them to save. The
focus on real, everyday future income needs and solutions will help
to change investors’ mindsets and bring greater awareness and
participation by investors in 401(k) plans,” said Edmund F. Murphy,
III, Managing Director, Head of Defined Contribution, Putnam
Investments.
Putnam’s Retirement Income summit included remarks by Reynolds
and Murphy and a panel chaired by Jeffrey R. Carney, Putnam
Investments Head of Global Marketing, Products, and Retirement. The
panel featured practitioners and academics, including Shlomo
Benartzi, Professor and Co-Chair of the Behavioral Decision Making
Group at UCLA’s Anderson School of Management; Charles A. Ruffel,
Founder and Director of Asset International/ PLANSPONSOR; Dallas L.
Salisbury, President and CEO of the Employee Benefits Research
Institute; and Jeffrey Knight, Managing Director, Head of Global
Asset Allocation, Putnam Investments.
Putnam Investments and Retirement
Americans Cite Need for a Clearer Picture
At yesterday’s event, Putnam discussed recent research findings
based on a survey of nearly 1,500 Americans. The research revealed
that investors claim to know little about what they will need in
retirement or how much income they can expect to have. Key research
highlights included:
- More than half of all Americans
(52 percent), and even more of those who identified themselves as
participating in defined-contribution plans (61 percent), said they
needed a clearer picture of how much income they needed in
retirement.
- Only 23 percent of the 1,496
respondents consider themselves to be “knowledgeable” when it comes
to determining how much income their retirement savings will
generate in retirement.
The Lifetime Income Analysis Tool is part of a deepened
commitment by Putnam Investments to the retirement market and
complements calls by Reynolds for sweeping policy reforms to help
meet the nation's emergent retirement savings challenge. Reynolds’
proposals are helping to shape a growing debate in Washington over
how to help Americans save more for retirement.
In recent months, Putnam has launched a series of retirement
initiatives, including its new online Roth IRA Resource Center with
a full range of information about individual retirement account
(IRA) conversions, how to evaluate whether they make sense and how
to perform them. The Roth IRA Conversion Center is aimed at
financial advisors, who are dealing with a flood of demand from
their clients for advice on conversions since a tax law change took
effect on January 1, 2010, eliminating income caps that restricted
higher-income investors from converting traditional IRA assets to
Roth IRAs.
Putnam also has expanded the services it offers to 401(k)
retirement plans and developed products to meet the needs of those
planning for or already in retirement. The firm has created a
platform that provides flexible and scalable services and solutions
for advisors, consultants, and their plan sponsor clients in every
segment of the retirement market.
Putnam RetirementReady® Funds, the firm's suite of 10
target-date/lifecycle retirement funds, recently added target
Absolute Return Funds* to its mix of underlying investments.
RetirementReady Funds became the only suite of lifecycle funds to
integrate absolute return strategies, which seek positive returns
over time with less volatility than more traditional mutual funds.
Employed in retirement portfolios, Putnam Absolute Return Funds are
intended to pursue positive returns in up and down markets, to
protect against the harmful effects of adverse investment returns
and to reduce volatility, particularly for investors in or near
retirement.
About Putnam Investments
Founded in 1937, Putnam Investments is a leading global money
management firm with over 70 years of investment experience. As of
December 31, 2009, Putnam had $115 billion in assets under
management. Putnam has offices in Boston, London, Frankfurt,
Amsterdam, Tokyo, Singapore, and Sydney. For more information,
visit http://www.putnam.com.
Putnam mutual funds are distributed by Putnam Retail
Management.
* Putnam's target Absolute Return Funds are not intended to
outperform stocks and bonds during strong market rallies.
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