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Quantum for retirement - short term funding

For various reasons, not all clients have the ability to commit to long term regular savings to help build a nest egg for retirement. For these clients short term funding could be the solution.

The minimum premium term for Quantum is 5 years. However, as it is a whole of life regular savings policy, once the premium term is complete, the policy can remain invested until such times as the client chooses to retire. And remember, unlike a pension, the client can take funds earlier if their circumstances change.


Example: Using Quantum, the table below illustrates the fund values that could be achieved adopting a short term funding approach. The examples assume that the client is aged 35 at outset, they invest USD2,500 per month and the fund values grow each year at 6% up until the chosen retirement age of 65.


Client age: 35 Target retirement age: 65


Premium term
Monthly premium
USD
Total premiums paid
USD
Fund value at age 65
USD
5 yrs 2,500 150,000 681,000
7 yrs 2,500 210,000 903,000
10 yrs 2,500 300,000 1,230,000
12 yrs 2,500 360,000 1,400,000
15 yrs 2,500 450,000 1,650,000

The assumed growth rate used to calculate the figures shown above are after the deduction of the contract charge (1.5% per year deducted monthly) and any external fund management charges.


The figures provided assume the following:


  • No withdrawals have been taken
  • All premiums are paid throughout the selected premium terms
  • The policy remains active until the target retirement age

The values shown in these examples assume that a constant growth rate has been achieved. In practice fund growth is prone to variance and future performance cannot be predicted.


Remember that the effects of inflation will reduce the purchasing power of your client’s investment over time.


For further information, please read the Quantum literature suite that is available to download.