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This is sponsored content submitted by Sun Life Financial.

For the parents of baby boomers, retirement seemed like a 100-yard dash – blasting out of the blocks at age 65 and over in a flash.

Now that Canadians are more active and living longer in retirement, it feels more like a five-kilometre run. Have you considered talking to your clients about adjusting their plans, so their retirement income keeps pace with their increasing life expectancy?

Clients who gamble they won’t live past age 90 increase their risk of running out of money in retirement. The odds are pretty good that they’ll be nonagenarians – or even centenarians!

Media coverage abounds about Canadians living longer. National Geographic trumpets, “This baby will live to be 120.”1 Canada’s Chief Actuary, Jean-Claude Ménard, reports that many Canadians will live longer than age 90. He projects Canadians will continue to be at the top of the list of the world’s life expectancies, along with France, Switzerland, Italy, Japan and Australia.2

Compelling statistics also drive home that conclusion:

We’re living longer | A longer life means Canadians might need more retirement income for the long run.

Using longevity statistics in discussions with your clients can lead to conversations about retirement income and the need to extend their planning horizons to reflect today’s realities.

Three steps to success

Because Canadians are living longer and leading more active lives, they need to consider a retirement lasting 20 or 30 years, or even longer. The following process could lead to a better retirement income plan for your clients.

1. Use the Money for Life – Longevity Risk Illustrator tool

Sun Life Financial’s new Longevity Risk Illustrator tool provides life expectancy projections your clients may find helpful when estimating how much retirement income they may need. Unlike a life expectancy calculator that provides just a single weighted average age, the tool considers the probability of living to different ages based on current age, gender and relationship status. This interactive tool can show your clients how long they may need retirement income and some of the risks associated with living longer.

2. Project retirement income needs

Two-thirds of advisors who participated in a survey strongly agreed on the importance of discussing longevity with clients in retirement planning discussions.3 Yet the average age this group of advisors used when creating retirement or financial plans with clients was 88 years, in terms of how long clients’ money needs to last. Many of the planning tools some advisors are using today – including industry best practices – are pre-filling defaults with figures that plan for shorter lifespans.

Current planning behaviour hasn’t kept pace with today’s aging demographic. Extending the age for life expectancy would reflect the new longevity research and help shield your clients from transferring more longevity risk onto their shoulders.

3. Offer solutions

Convincing your clients to start saving more now for their longer retirement exponentially increases the amount of income available when they finally do open their retirement safe.

Many advisors also recognize the value of providing some guarantees in retirement plans, proven by the past success of Guaranteed Minimum Living Benefit and Guaranteed Minimum Withdrawal Benefit products.

It’s important for clients and advisors to look for flexible solutions that include some guarantees. Consider exchanging a percentage of a client’s mutual fund portfolio for an upfront purchase of a guaranteed lifetime income product, such as a life annuity, representing a conservative portion of a retirement income portfolio. Offering some guarantees can help clients feel confident they can spend during early retirement, without having to worry about outliving their money.

See how the Longevity Risk Illustrator tool works and go to sunlife.ca/advisor to sign in and access the tool on the Money for Life web app. The newly published article Are your clients prepared for a longer retirement if it comes earlier than expected? also sheds light on an important retirement planning issue.

To learn more about retirement solutions from Sun Life Financial, talk with your Sales Director.

1National Geographic, May 2013.

2Barbara Shecter, “Canadians face more years of saving, work as chief actuary increases life expectancy,” Financial Post, April 16, 2014.

367% of advisors, Sun Life Longevity Survey, October 2013.

Rocco Taglioni, Senior Vice-President, Head of Distribution, Individual Insurance and Wealth, is responsible for the overall leadership of Sun Life Financial’s distribution organizations across its Retail business in Canada. His role encompasses the leadership of the distribution company, as President Sun Life Financial Distributors Inc., as well as the Insurance and Wealth wholesaling sales organizations. Through the various leadership teams he oversees the development, direction, and execution of the Distribution strategies centered on wealth management, protection, retirement, and estate and financial planning.

Since joining Sun Life in 2004, Rocco has held various executive leadership roles, including Vice-President Business Development, Group Benefits; Head of Individual Wealth Management; Senior-Vice-President, Client Solutions; and most recently Senior Vice-President, Distribution and Marketing, Individual Insurance and Wealth. Throughout his tenure at Sun Life, Rocco has led various business strategies centered on building, transforming, and evolving organizations and teams to drive higher levels of performance and success.

Rocco has 36 years of experience in strategic leadership in the insurance and investment industries. He has served on and is a member of a number of boards. Rocco is currently President and Chair, Sun Life Financial Distributors (Canada) Inc. and is a member of the Sun Life Financial Investment Services (Canada) Inc. board. He is a member of various industry associations, including Advocis, GAMA Canada, the Canadian Pension and Benefits Institute, and the Association of Canadian Pension Management.

Rocco holds a Bachelor of Arts in Economics from York University.
Originally published on Advisor.ca