Putnam Investments today announced plans to launch new funds and a planning tool to help advisors work with retirees and soon-to-be-retirees to develop monthly income flows at varying levels of risk tolerance.
The Boston-based company said its new suite of income-oriented funds will integrate absolute return strategies that seek positive returns with less volatility than traditional asset classes. The funds are focused on the drawdown phase of an investment portfolio and are aimed at investors who are already in retirement, who plan to retire in the near future, or who expect to withdraw their invested funds soon.
The product suite will comprise the Putnam Retirement Income Fund Lifestyle 1 (conservative option), Putnam Retirement Income Fund Lifestyle 2 (moderate option) and Putnam Retirement Income Fund Lifestyle 3 (most aggressive option).
The funds are expected to provide a broad offering for defined contribution, IRA and other retirement assets. They will be accompanied by a new planning tool to help advisors and clients develop personalized income strategies to draw from their retirement savings. The company said the funds and the tool can be customized and regularly updated to meet the evolving needs of retirees.
Putnam is targeting a ready market. According to the U.S. Census Bureau, approximately 75 million baby boomers will start turning 65 in 2011, or a rate of about 7,000 per day.
"Turning life savings into lifetime income is the toughest challenge millions of Americans face as they move into retirement. The stakes are very high," said Robert L. Reynolds, Putnam's president and CEO. "We are seeking to address the breadth of retirees' ever-changing lifestyle income needs and full range of risk tolerance by offering clear guidance on withdrawal rates that can be adjusted regularly, as markets and their own life circumstances change."
Pending regulatory approval, Putnam expects its suite of three funds to be available by midyear, with the tool to be available at or near the funds' launch.