The Retirement Funds Integrator (RFI) combines 3 major components of a retirement plan that are usually treated separately: financial assets, annuities, and reverse mortgages. By seamlessly combining them into one plan RFI can provide a number of benefits to retirees:
Risk protection
You are protected against the risk of running out of money at an advanced age by the only instrument designed specifically for that purpose: the annuity.
Provider choice
By obtaining an annuity through RFI, you have access to price quotes from over 10 highly-rated insurers offering annuities, and can select the insurer offering the largest annuity payment.
Spendable funds are stabilized
Using RFI, the spendable funds available to you from financial assets, annuity and reverse mortgage are seamlessly integrated – meaning that fund source changes in themselves do not change the payment amounts.
Plan for inflation
You can modify the future pattern of spendable fund draw amounts by adding an annual inflation adjustment of and/or by stipulating a U-shaped pattern or an inverse U-shaped pattern of draw amounts.
Purposeful estate planning
The amount you leave to your estate using RFI is determined mainly by the amount of a Set-Aside created by the retiree for that purpose, rather than by chance.
Guidance based on historical returns
You can plan when and how to draw on financial assets in a RFI-based plan, and receive guidance in the form of distributions of rates of return over relevant historical periods on portfolios similar to your own.
Plan for a “worst case”
While planning when and how to draw on financial assets, you can model a “worst case” in which the realized rate of return on assets falls below the rate used in calculating the draw amount. You can stipulate that, if the worst case occurs, the draw amount will be reduced, or the amount needed to offset the deficiency will be drawn from either a HECM credit line or a Set-Aside.
Best HECM deals
HECM reverse mortgages are used either to enhance the monthly draw amounts using term or tenure payment options, or as a standby facility to offset a special need using the credit line option. By accessing a HECM through RFI, you have access to the best deal offered by lenders who provide their pricing to RFI.
Many options
A major feature of RFI is that you have many options. These include the annuity deferment period, the rate of return used to determine the initial draw amount from financial assets, the desired future pattern of draw amounts, whether a HECM reverse mortgage is included in the plan or not, and if it is, which option is to be used. Because RFI is so option rich, graphical time series displays are used to compare alternative scenarios. For the same reason, we envisage you working with an investment advisor.