A new study shows a huge disconnect between financial advisors and their clients when it comes to retirement income.
Retirement Income Planning Gap: Key Statistics
The 2024 Protected Retirement Income and Planning Study, conducted by the Alliance for Lifetime Income, found that 62% of advisors say they bring up the topic of secure income with their clients, but only 27% of investors say they’ve actually heard their advisors talk about it.
Retirement Summit Insights: Client Perspectives
The Alliance for Lifetime Income held a Protected Income Retirement Summit in Washington last week and featured a panel of five consumers, all over the age of 50, who said they aren’t sure if their advisors are interested in creating an income plan. They believe they were more interested in asset accumulation.
One couple said their advisor brought them in recently and said, “What are we going to do here?” The couple called that an eye-opener that they need to invest in planning. They are considering changing advisors to access a holistic, complete plan.
Real-World Retirement Planning Challenges
These investors are not alone. I’ve sat with prospective clients who had another advisor, and have yet to see a true retirement income plan that has ever been presented to the client.
In one case, the prospective client told me that they needed some money from their investments and called their advisor, and he asked them what they wanted to sell.
Comprehensive Retirement Planning: Essential Components
At this point, I would ask, what are you paying your advisor for? It should be our job to create a retirement income plan, that incorporates your guaranteed income sources like Social Security, and pensions, and evaluates if you need additional guaranteed income from your investments. It should create an investment strategy that provides monthly income from your investments, that increases over time to adjust for inflation, and that controls what you sell, and when you sell it to avoid selling an investment while it is losing value. It should include a tax strategy, and address Long Term Care needs, and estate planning. And, it should all be written down.
GenWealth Ready to Retire Process
These are all components of the Ready to Retire Process at GenWealth. But, investors are not getting that nationwide.
Advisor-Client Communication Study: Detailed Findings
Back to that study. 98% of advisors said they discuss sources of protected income like Social Security, pensions, and annuities, but only 69% of clients said the discussions are happening.
96% of advisors said they discuss when clients should withdraw from certain accounts, but only 66% say the discussions are happening.
And 95% of advisors say they talk about how to minimize taxes, but only 64% of clients say that conversation occurs.
Written Retirement Planning: The Importance of Documentation
It’s possible that some advisors are talking about it, but clients don’t remember. But, I would say that means they aren’t producing a written plan, on paper on purpose, that is updated regularly because we know life happens.
Investor Concerns and Priorities: Retirement Security
We also know that’s what investors want and need. Nearly half of the participants in the study said they’re unsure if their income will last throughout their lifetime, and 96% said protecting retirement is important to them. Your advisor should know what’s important to you, and create a plan to get the outcome you want.
The opinions voiced in this video and blog are for general information only and are not intended to provide specific advice or recommendations for any individual.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance. Independent Advisor Alliance and GenWealth Financial Advisors are separate entities from LPL Financial.
