Ibbotson Associates Launches Portfolio Planner Tool

The Portfolio Planner includes allocations to equities, fixed income and payout annuities, according to a press release from the company. The planner also demonstrates the probabilities of those portfolios providing income for 25 years at different withdrawal rates.

According to the company, advisors first narrow the choice of 27 model portfolios offered based on the client’s age, risk tolerance, and bequest desires. The advisor then displays two model portfolios, one using payout annuities and one without, according to the news release. Monte Carlo simulations can be viewed for both portfolios and the planner can also be customize to meet the needs of financial institutions.

“As life expectancies rise and reliance on pension plans and Social Security declines, individuals are increasingly turning to advisors to help them fund a comfortable retirement. But traditional financial planning practices alone cannot address all the risks faced by this new breed of retiree,” said Michael Barad, vice president at Ibbotson Associates, in the news release. “Retirement strategies that combine lifetime income-producing financial instruments, such as fixed and variable payout annuities, along with conventional investment instruments, such as mutual funds and bonds, can reduce the risk of running out of money.”

Ibbotson Associates is an asset allocation, products and services firm.