Retired Money
By Jonathan Chevreau on October 29, 2024
Estimated reading time: 10 minutes
By Jonathan Chevreau on October 29, 2024
Estimated reading time: 10 minutes
While not guaranteed like an annuity, MyRetirementIncome is a flexible and simple financial product for those needing to convert nest eggs into income.
Late in September, Sun Life joined a small group of Canadian financial firms offering would-be retirees a decumulation product designed to help pensioners make the often-tricky transition from saving and accumulating wealth to drawing it down. It’s called MyRetirementIncome.
In doing so, it joins Guardian Capital’s Glidepath and the Purpose Longevity Fund, among others. Even so, Sun Life describes MyRetirementIncome as “a first of its kind in Canada” that “fills a gap in our industry in Canada.” It also resembles asset allocation ETFs (exchange traded funds), like Vanguard’s VRIF (Vanguard Retirement Income ETF Portfolio).
There appears to be a market in Canada for these kinds of products, despite tepid initial sales of some of the above-named pioneers. In Sun Life’s press release, it says that 5 million Canadians are “turning 65 this decade,” so there’s “growing demand for retirement solutions that help Canadian retirees transition from saving to drawing income.”
Some cynics might opine that these are as much a solution for workplace pension managers to their own problem of retaining client assets accumulated during their clients’ wealth-building days.
Among the benefits Sun Life lists are that it turns savings into regular income. “Clients will receive regular payments delivered directly to a bank account, similar to a paycheque.” It’s flexible, providing full access to client account balances: “Money can be withdrawn or added at any time, without fees or penalties.”
Despite a significant fixed-income component, it also provides opportunity for growth, with savings “invested in a well-diversified portfolio that is specifically designed for individuals in retirement, properly balancing risk and return to generate stable investment returns.”
Sun Life deploys its pre-existing multimanager Granite Moderate Retirement Fund as the base for MyRetirementIncome. It taps 16 global specialized managers for a similar number of asset classes; apart from the usual stocks and bonds, they include Emerging Market Debt, Liquid Real Assets, Direct Infrastructure, Liquid Alternatives and Direct Real Estate. Managers include: BlackRock Asset Management, Lazard Asset Management, Phillips, Hager & North, RBC Global Asset Management and its very own Sun Life Capital Management.
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