Transitioning from saving for retirement to spending in retirement can be difficult. Decisions need to be made—from how much to take in distributions from your retirement accounts to assure your payments last your lifetime, to when to adjust those payments and by how much. LifeStage Retirement Income helps make this easier. It is designed to help make your money last—by avoiding taking too little out and enduring unnecessary hardship, or taking too much out and running out of money.
Planning Your Retirement Distributions
LifeStage Retirement Income turns your defined contribution account into monthly payments designed to last for your lifetime. It adjusts payments automatically each year based on age, remaining account balance, changes to the cost of living and other factors. LifeStage Retirement Income is available to manage your distributions in retirement at no additional cost.1
LifeStage Retirement Income manages your payments, while LifeStage Investment Management manages the investment of your account, determining an appropriate investment strategy. This combination of services helps to provide regular monthly income with cost-of-living adjustments.
While retirement income payments generally increase with the cost of living, market downturns can prevent you from receiving increases, or in extreme circumstances, can result in decreases in your payment amount. While the likelihood of running out of money is small, LifeStage Retirement Income cannot guarantee that the account balance will last for your lifetime. However, unlike most guaranteed products (e.g., annuities), you do have the flexibility to leave any remaining account balance to beneficiaries upon your death.
When enrolling in LifeStage Retirement Income, you can set aside a reserve amount—up to 20% of your account balance—for anticipated expenses or emergencies. This money is not factored into your monthly payment calculation and is managed with a more conservative investment strategy.
You can opt out of LifeStage Retirement Income at any time and determine your own monthly payment amount. EY Financial Planning Services is also available to eligible participants to help determine an appropriate payment amount. If you keep your money at Wespath, you may reenroll in LifeStage Retirement Income at any time, provided you continue to meet the eligibility requirements.
Calculating Your Payments
If you aren’t sure whether LifeStage Retirement Income is right for you, or if you’d like to manage your own distributions but would like guidance, use the LifeStage Retirement Income Calculator available in Benefits Access.
If you are using the calculator for self-managing distributions, run the calculation annually to determine whether adjustments (increases or decreases) are necessary. This will improve the likelihood that your money will not run out. Remember, the calculations assume you invest through LifeStage Investment Management. If you self-manage investments, the calculator results may not accurately reflect your situation, and your account balance may be exhausted prematurely.
How to Sign Up
If you’re already retired or planning to retire soon, it’s time to review your retirement income options. In order to participate in LifeStage Retirement Income, you must:
- Be eligible to take a distribution from your defined contribution account.
- Have an account balance that is large enough to support a monthly payment of at least $100.
- Agree to roll all defined contribution account balances into UMPIP.
If you are eligible, you can sign up through Benefits Access. Go to “Take Action”; under “Manage Distributions,” select “Sign up for LifeStage Retirement Income.” If you have questions, call Wespath at 1-800-851-2201.
1 Costs for these services are included in Wespath’s operating expenses that are paid for by the funds.
Accounts Managed by LifeStage
LifeStage Retirement Income can be used to manage distributions for all of your defined contribution accounts, including the Clergy Retirement Security Program Defined Contribution plan (CRSP DC), the United Methodist Personal Investment Plan (UMPIP), the Retirement Program for General Agencies (RPGA) and the Horizon 401(k) Plan. Any balances in these accounts will be consolidated into a single defined contribution account in UMPIP. If you have a Ministerial Pension Plan (MPP) account, you can also include up to 35% of your MPP account balance in LifeStage Retirement Income by initiating a rollover into UMPIP.