Devising the best possible retirement plan for clients is always top-of-mind for advisors. Use these articles to add to your knowledge of key risks and effective strategy options.
Although the idea of financial planning is now well accepted, planners still face a number of hurdles. To begin with, few people actually have plans, but even many of those who do have a plan don’t understand and connect it to their everyday life. This is particularly evident when it comes to retirement planning.
One of the difficult decisions that must be made at the start of retirement is how to create lifelong income for your client. There are several choices: You can generate income from an investment portfolio, you can buy life annuities or you can try the variable annuities with guaranteed pay for a specified term.
Peter Drake, vice president, Retirement and Economic Research, Fidelity Investments Canada ULC, calls attention to the new retirement realities facing Canada’s baby boomer generation and highlights the importance of taking account of the five key risks to retirement income as part of the retirement planning process.
Retirement is idealized in advertisements as a time of comfort and leisure. It is when the physical and psychological stresses of work life are laid aside replaced by an enriched personal life underpinned by financial security. You’ve all seen the pictures of fit, smiling senior couples strolling along beaches, gazing at sunsets. I can’t speculate on personal enrichment since it’s something very much in the eye of the beholder but I do know that the financial aspect of retirement cannot be taken for granted.
Over the past few years, retirement has been redefined for your aging clients. Government funding requirements have continually shifted, and the days of leisurely retirements seem to be passé. For the new age of retirees, part-time work and “phased retirements” are now the norm. But, is this change one of choice or need?