Scenario 1–Second Year
In the first scenario, the cost-of-living increase is assumed at 2%, and the market gains and earnings on Anne's account match the amount she receives in monthly payments. Her payment increases by $7 to $362, falling within the new payment safety zone.
If there are large swings in investment returns, the payment safety zone may shift higher or lower. This change could cause Anne's monthly payment to be adjusted higher than the cost of living—or her payment could decrease.
Scenario 2–Second Year
In the second scenario, there is a significant 25% market gain.
Instead of a $7 increase, Anne's payment increases $16. The additional $9 added to her monthly payment keeps it within the safety zone.
Scenario 3–Second Year
On the other hand, if there is a significant market decline, Anne's payment could decrease.
In the third scenario, there is a sizeable loss in Anne's investments, yet LifeStage Retirement Income manages Anne's monthly payments so that there is only a minor impact on her monthly income, as shown in the illustration.