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Helping baby boomers with changing retirement needs
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As the baby boomer generation enters retirement, financial professionals are learning to adapt to changing client expectations. While saving and growing funds has been their focus for the last few decades, they鈥檙e now looking for ways to convert savings into a sustainable retirement income.
This transition may require some financial professionals to add decumulation strategies to what they now offer. Get started by:
- understanding the nature of baby boomers鈥� concerns about having enough retirement income
- looking for opportunities to adopt new financial products and strategies that help ensure your practice continues to meet their needs
Guaranteed income is a major concern
Baby boomers face greater financial challenges than previous generations. Many are carrying mortgages into retirement, while others belong to the sandwich generation that鈥檚 still supporting their adult children and even elderly parents. On top of these challenges, lifespans are increasing.
On average, 65-year-olds today are expected to live to age 871 and some will live past that.
With longer lifespans can come increased lifetime costs for housing, day-to-day expenses and, especially, health care. Looking ahead, clients need help developing a retirement income plan that can support their desired lifestyle 鈥� and they want to eliminate as much uncertainty as possible from that plan.
Research from Kiplinger and 麻豆传媒 shows that Americans are looking for more guaranteed income in retirement to help offset challenges, like inflation, market volatility and outliving their money.
Key findings
Most poll respondents (75%) want more guaranteed income in retirement than they have or expect to have, helping ease concerns about running out of money.
More than half of retired (57%) and non-retired (64%) respondents agree having more guaranteed income would ease concerns over market volatility.2
How fixed indexed annuities help address client concerns
Given strong client interest in guaranteed income, financial professionals should consider how specific products and financial strategies can help meet that need. Fixed indexed annuities (FIAs) can complement other tools in a retirement income strategy, including 401(k)s, IRAs and Social Security benefits.
FIAs provide guaranteed income in retirement through a unique design that offers a combination of growth potential and protection from market downturns.
How a FIA works, big picture
- The FIA contract earns interest that鈥檚 tied in part to the growth in one or more stock market indices.
- Interest income can rise as an index increases in value.
- When the index is down, the contract鈥檚 Accumulated Value is protected from market decreases.
This combination of growth potential plus protection can help instill confidence in clients concerned about having enough savings to support their retirement lifestyle. Additional sources of guaranteed income in a retirement plan can also provide greater flexibility for investing in other assets, which can help:
- further address longevity risk
- create a legacy
- provide a cushion against higher-than-expected medical bills
- manage surprise expenses
Strengthening your practice
Helping baby boomers with their changing retirement needs is good for clients 鈥� and it can be good for your business, too. Financial professionals who can assist boomers with their new retirement landscape may enjoy greater levels of customer satisfaction and loyalty. In turn, they could gain referrals from those happy clients.
While you may keep more client assets under management, your clients can feel confident as you oversee their retirement income plan.
Insights on 麻豆传媒 Connect. Tips, tools and resources to grow your business by helping clients retire with confidence.
1Congressional Budget Office,
2, 2022
