Step 5—Develop A Solution: If your client’s income sources do not cover all their essential expenses and they have a retirement income gap, you should develop a tailored solution together, with a main goal of creating dependable guaranteed income to cover their essential expenses. If appropriate, you could also discuss a financial strategy that may help them cover their discretionary income and also fulfill any legacy wishes.
Annuities can be part of this discussion as they can help meet long-term retirement goals by offering tax-deferred growth potential, a death benefit during the accumulation phase, and a guaranteed stream of income at retirement. It’s crucial that clients have a plan to fund essential expenses with sources of dependable income, and annuities can help supplement Social Security income as a reliable source. I can’t emphasize enough that there has to be a plan in place that will increase this guaranteed income stream over the life of each of the clients either as an increase built into the product or another supplemental source—otherwise the plan will fail.
By using the Value of Income Planning process to engage with your clients about retirement income, you can provide a holistic review of their financial income plans and discuss all of the available options for meeting their expenses in retirement. This can help your clients set realistic expectations about their income and expenses, and feel more confident about their overall retirement security.
With these actionable steps, you and your client can work together as a team to get an income strategy in place. This should help them feel more comfortable with spending in retirement and more prepared to start descending their retirement income savings “mountain.”
Kelly LaVigne is vice president of advanced markets at Allianz Life.