The Mutual Fund Store® Introduces ‘Retirement Paycheck™’ Service
OVERLAND PARK, Kan.-(Business Wire)-September 25, 2009 - The Mutual Fund Store®, a nationwide system of Registered Investment Adviser firms founded by Adam Bold, today introduced its Retirement Paycheck™ service, an innovative asset management process designed for retirees and others in the distributive stage of their investment life-cycle.
“Our straightforward approach to helping investors manage their hard-earned assets has been successful across the country,’’ Bold said. “As people learn about our Retirement Paycheck™ service, I believe they’ll realize it’s the solution they’ve been looking for to help them generate predictable monthly income and protect their retirement nest egg.”
The Retirement Paycheck™ service provides—for the first time—an asset management option for retirees designed to offer predictable income, principal protection combined with the potential for unrestrained asset growth, and periodic replenishment of assets used for monthly income. Bold said the genesis for the service came during the most recent market downturn.
“We’ve been through two bear markets in the past decade,’’ Bold said. “It’s terrible that many retirees were forced to sell their assets in a down market to generate the income they need to pay their bills and maintain their quality of life. They need income they can rely on regardless of what the market is doing.
“It’s easy for investors to make a crucial mistake,’’ Bold said. “When you’re in retirement, you can’t afford that mistake. You don’t want to run out of money.”
The new service is designed to minimize the impact of a market downturn on a retiree’s nest egg by establishing a pool of assets to generate predictable and monthly income, just as if they were still working. As market growth increases the value of the other part of their assets, some of it is used to replenish the value of the assets the income is drawn from.
“Many people have turned to alternatives like ‘guaranteed’ annuities from insurance companies,’’ Bold said. “We learned in this recession that those guarantees are only as good as the financial strength of the company making the guarantee. Also, because of their upfront costs and potential surrender penalties, the cost for these products can far outweigh their potential benefits.”
Retirement Paycheck™ also allows retirees to participate in the growth potential offered by the stock market by keeping a portion of their money invested in stock and bond mutual funds.
In addition to ongoing management, the Retirement Paycheck™ service includes features that aren’t collectively available through other investment alternatives for retirees. (Click here for more information on the service’s features.)
About the Retirement Paycheck™ Service
The service begins with an evaluation of an investor’s overall financial situation, including a determination of the monthly income he or she desires. Based on the amount of those expenses, a Mutual Fund Store advisor will develop a personalized investment plan by dividing an investor’s assets into two pieces: an income protection component and a growth component.
The Income Protection Component is managed conservatively by investing in short-term securities (and bank CDs) to protect income; the Growth Component is managed through a traditional asset allocation approach utilized for all clients of The Mutual Fund Store.
Retirement Paycheck™ clients will receive a monthly payment from their Income Protection Component—a portfolio of securities with natural AAA ratings (e.g., U.S. treasuries, corporate bonds and municipal bonds), bank CDs and money market mutual funds. Its value is continually maintained at a level sufficient to provide monthly payments for anywhere from 1 to 5 years.
Growth Component assets—a diversified mix of mutual funds investing in domestic and foreign stocks and bonds—are invested in a moderately aggressive portfolio, allowing clients to continue investing for the long-term.
As the stock market moves through normal up and down cycles, clients are able to rely on their income protection component to cover normal expenses without having to sell assets at lower prices. In down markets, the value of the Income Protection Component naturally decreases as account owners receive monthly payments. As stock market growth occurs, a portion of the profits from the Growth Component are used to replenish or increase the amount of the Income Protection Component.
About The Mutual Fund Store
The Mutual Fund Store® is the nation’s fastest-growing nationally-branded, independent, registered investment advisory organization. The Mutual Fund Store is a nationwide system of registered investment advisory firms which includes independently-owned and –operated franchise stores and company-owned stores. The Mutual Fund Store investment advisors provide investment advisory services to clients using mutual funds and asset allocation models recommended by The Mutual Fund Research Center, LLC, under the direction of Chief Investment Officer Adam Bold and Stacey Schreft, Director of Investment Strategy. For the period ended Aug. 31, 2009, The Mutual Fund Store system of investment advisors collectively managed more than $4.1 billion in assets for more than 26,600 clients. Founded by Bold in 1996, the company is headquartered in the Kansas City suburb of Overland Park, Kan. TMFS Advisory Services, LLC, an SEC registered investment adviser, provides investment management for the Retirement Paycheck™ service.
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