Steady-Need Strategy

Translating savings into a regular “paycheck” in retirement can feel challenging. The challenge is making sure your distribution plan provides you with the retirement income that helps you achieve your goals and address your concerns while lasting as long as you do. Work with your financial advisor to determine your individual needs and develop a written plan to address them.

The Income for What’s Next®: Steady-Need Strategy has a relatively conservative level of risk in seeking to support an annual withdrawal strategy to address reliable income needs. The strategy is comprised of a 20% allocation each to the Franklin Total Return Fund, Templeton Global Bond Fund, Franklin Adjustable U.S. Government Securities Fund, Franklin Income Fund and Franklin Rising Dividends Fund. The hypothetical illustrations below show how this investment strategy and the use of systematic withdrawals may fit as part of a well-diversified retirement income investment portfolio.

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HYPOTHETICAL ILLUSTRATIONS: 19 YEARS OF SYSTEMATIC AND INCREASING WITHDRAWALS1

January 1, 2000–December 31, 2018

$100,000 Initial Investment (Advisor Class), $5,000 First-Year Withdrawal Amount (5% of Initial Investment), 3% Annual Increase in Withdrawal Amount, Reinvest Dividends and Capital Gains

 

SUMMARY ILLUSTRATION BASED ON SYSTEMATIC WITHDRAWALS

$125,586 
Total Withdrawals
Based on 19 years of systematic and increasing withdrawals

Summary Chart

HYPOTHETICAL ACCOUNT VALUE AFTER $125,586 OF WITHDRAWALS

$111,151 
Ending Portfolio Value - Advisor Class

$42,941 
Ending Blended Benchmark Value2

Hypothetical Account Value Chart

AVERAGE ANNUAL TOTAL RETURNS3

Periods ended June 30, 2019

Funds are available in additional share classes which may have different fees.

 Franklin Total Return Fund - Advisor Class (FBDAX)
Templeton Global Bond Fund - Advisor Class (TGBAX) 8Franklin Adjustable U.S. Government Securities Fund - Advisor Class (FAUZX) 10Franklin Income Fund - Advisor Class (FRIAX) 12Franklin Rising Dividends - Advisor Class (FRDAX)14
 Class A PerformanceClass A PerformanceClass A PerformanceClass A PerformanceClass A Performance
Fund Description The fund seeks to provide high current income consistent with preservation of capital. Capital appreciation over the long term is a secondary goal. The fund primarily invests in debt securities, which may be represented by derivatives that provide exposure to debt securities. The fund focuses on government and corporate debt securities and mortgage- and asset-backed securities.4 The fund seeks current income with capital appreciation and growth of income, by investing at least 80% of its net assets in bonds issued by governments, government related entities and government agencies located around the world. The fund regularly enters into various currency-related and other transactions involving derivative instruments. The fund seeks a high level of current income, while providing lower volatility of principal than a fund that invests in fixed-rate securities. The fund invests predominantly in adjustable-rate mortgage securities (ARMS) that are issued or guaranteed by the U.S. government, its agencies or instrumentalities. The fund's investments may include securities issued by government-sponsored entities, such as Fannie Mae and Freddie Mac.4 The fund seeks to maximize income, while maintaining prospects for capital appreciation, by investing in a diversified portfolio of stocks and bonds. The fund seeks long-term capital appreciation by investing at least 80% of its net assets in companies of any size that have paid consistently rising dividends.
Inception Date 8/3/98 9/18/86 10/20/87 8/31/48 1/14/87
1-Year 7.70% 5.56% 1.89% 6.02% 13.98%
3-Year 2.67% 4.57% 0.96% 7.75% 13.30%
5-Year 2.52% 1.50% 0.58% 3.31% 10.01%
10-Year 4.84% 4.90% 1.01% 8.85% 13.87%
Since Inception 5.08% 7.32% 3.66% 10.13% 9.63%
Expense Ratio Without Waiver5 0.67%
With Waiver 0.63%
Without Waiver9 0.77%
With Waiver 0.69%
Without Waiver11 0.72%
With Waiver 0.71%
0.47% 0.63%
30-Day Standardized Yield6
As of 06/30/19
Without Waiver 3.33%
With Waiver 3.37%
Without Waiver 5.38%
With Waiver 5.46%
Without Waiver 2.08%
With Waiver 2.09%
4.17% N/A
Beta (3-Year)7
As of 06/30/19
- - - 1.08 0.98

WHAT ARE THE RISKS?

Franklin Total Return Fund
Performance | Prospectus

All investments involve risks, including possible loss of principal. Interest rate movements and mortgage prepayments will affect the fund’s share price and yield. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The risks associated with higher-yielding, lower-rated securities include higher risk of default and loss of principal. Investment in foreign securities also involves special risks, including currency fluctuations, and political and economic uncertainty. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the fund to participate in losses (as well as gains) on an amount that exceeds the fund’s initial investment. The fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. These and other risk considerations are discussed in the fund’s prospectus.

Templeton Global Bond Fund
Performance | Prospectus

All investments involve risks, including possible loss of principal. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the fund to participate in losses on an amount that exceeds the fund’s initial investment. The fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security’s value and on the fund’s ability to sell such securities when necessary to meet the fund’s liquidity needs or in response to a specific market event. Foreign securities involve special risks, including currency fluctuations (which may be significant over the short term) and economic and political uncertainties; investments in developing markets involve heightened risks related to the same factors. Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a government entity may be unwilling or unable to pay interest and repay principal on its sovereign debt, or otherwise meet its obligations when due. Investments in lower-rated bonds include higher risk of default and loss of principal. Bond prices generally move in the opposite direction of interest rates. As the prices of bonds in the fund adjust to a rise in interest rates, the fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. These and other risks are discussed in the fund’s prospectus.

Franklin Adjustable U.S. Government Securities Fund
Performance | Prospectus

All investments involve risks, including possible loss of principal. Interest rate movements, unscheduled mortgage prepayments and other risk factors will affect the fund’s share price and yield. Bond prices generally move in the opposite direction of interest rates. As the prices of bonds in a fund adjust to a rise in interest rates, the fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. These and other risk considerations are discussed in the fund’s prospectus.

Franklin Income Fund
Performance | Prospectus

All investments involve risks, including possible loss of principal. The fund's portfolio includes a substantial portion of higher-yielding, lower-rated corporate bonds and some floating rate loans, which are also higher-yielding and lower-rated. These investments have more credit risk than investment-grade securities and are subject to increased risk of default and potential loss of principal. The fund's share price and yield will be affected by interest rate movements. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the fund's share price may decline. Changes in the financial strength of a bond issuer or in a bond's credit rating may affect its value. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Foreign investing involves additional risks such as currency and market volatility, as well as political and social instability. These and other risk considerations are discussed in the fund's prospectus.

Franklin Rising Dividends Fund
Performance | Prospectus

All investments involve risks, including possible loss of principal. Value securities may not increase in price as anticipated or may decline further in value. For stocks paying dividends, dividends are not guaranteed, and can increase, decrease or be totally eliminated without notice. While smaller and midsize companies may offer substantial opportunities for capital growth, they also involve heightened risks and should be considered speculative. Historically, smaller- and midsize-company securities have been more volatile in price than larger company securities, especially over the short term. These and other risks are detailed in the fund’s prospectus.

Important Legal Information

This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation, or as a substitute for legal or tax counsel. Any investment products or services named herein are for illustrative purposes only, and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified professional or your own independent financial advisor for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance.

Franklin Templeton does not provide legal or tax advice. Federal and state laws and regulations are complex and subject to change, which can materially impact your results. Franklin Templeton Distributors, Inc. (FTDI) cannot guarantee that such information is accurate, complete or timely; and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

Investors should carefully consider a fund's investment goals, risks, charges and expenses before investing. Download a prospectus, which contains this and other information. Investors should read the prospectus carefully before they invest or send money.