Do Your Clients Have a Plan for Lifetime Income?

Will your clients outlive their income?

A successful retirement strategy requires an understanding of what your client’s income and expenses might be while in retirement. What you may not be able to calculate is – how long they might live in retirement.

“By the year 2050 there will be 9 million Americans over the age of 90.”

Challenges in retirement

According to the National Institute on Aging and the U.S. Census Bureau, by the year 2050 there will be 9 million Americans over the age of 90 – compared to 2 million today.¹ Add in rising inflation, market volatility and even uncertainty about the role Social Security will play, and you have clients who may face financial challenges while in retirement.

Planning for uncertainty requires a different type of strategy. A strategy that can turn a portion of your client’s savings into a protected income stream that won’t run out.

Start by understanding retirement “expenses”

It’s important that your clients understand the types of expenses they’ll have while in retirement – and the differences between them. “Essential” expenses are your basic, predictable, living needs you probably can’t live without – such as food, shelter, or healthcare. “Lifestyle” expenses are those things you could probably live without, but would prefer not to – such as travel, entertainment or hobbies.

It’s equally important to help your clients estimate how long their money may last in their retirement – this retirement planning tool can help. It’ll help them better understand any shortfalls they may have and possible ways to adjust their strategy.

Covering the “essentials” with a predictable source of income

Sources of retirement income such as 401Ks, IRAs, investments and savings are well-suited for covering lifestyle expenses. But depending on investment performance and asset utilization, they may run out. And lifestyle expenses are not critical, so clients can adjust their spending based on available resources.

However, your client’s essential expenses will never go away, no matter how long they live. So it makes sense that these expenses be accounted for with a predictable and protected source of income that they can’t outlive.

Supplement to an income strategy

Understanding that Social Security may not provide enough income for their essential expenses while in retirement – what can you recommend as a supplement to their income strategy?

Annuities offer a variety of options for predictability and growth potential, and could provide the additional predictable income your clients need to ensure their essential expenses are covered no matter how long they live in retirement.

Consider showing your clients what lifetime income looks like with a ForeIncome fixed index annuity. Try this retirement income calculator to help illustrate for your clients the value of guaranteed lifetime income. Take a look.