Helping to “Protect” Your Clients' Retirement Assets

Help your client “protect” their largest asset – their retirement nest egg.

If you asked your clients what they consider their largest or most valuable asset, they most likely would say their home. A home gives them shelter, a feeling of comfort and a sense of accomplishment. Whether your clients plan to downsize, relocate to warmer climates or leave their home to their beneficiaries, they hope their home lasts as long as they need it. So it makes sense that, as a homeowner, they have insurance for it.

“Many retirement portfolios may be worth more than a home – making it a client’s largest asset.”

Life insurance is similar. People buy life insurance to make sure their loved ones are protected in the event something should happen to them.

But what about a client’s retirement nest egg? Some retirement portfolios may be worth more than a home – making it a client’s largest asset. While there is no equivalent version of “retirement insurance,” there are steps your clients can take to help protect a portion of their retirement income.

Helping “protect” retirement from the elements

Just like a hurricane or a flood can have devastating effects on a home – a market downturn at the wrong time can have a devastating effect on a retirement portfolio and the quality of the retirement it supports.

Aside from market volatility, there are other possible pitfalls that could impact a retirement portfolio. What might happen to your clients’ assets if they require long-term care or have serious health issues? What about living longer than they expect? Is there a way to “protect” them from outliving their retirement savings? 

What’s your client’s decumulation plan?

The traditional method of converting a client’s retirement assets into a stream of monthly income is to create a drawdown or decumulation plan – maybe using a formula like the 4% rule. But making sure your client’s retirement income will last for life can be tricky. Even a life expectancy chart is not a crystal ball. Unknown challenges could pose serious risks to any plan.

As a financial professional, what else can you offer your clients to help ensure their retirement assets last as long as they do?

Protected income sources

Social Security offers some “protection” against completely running out of income in retirement. But considering that Social Security might only provide about 40% of their current salary, most retirees will have a gap between their income and expenses.

Additional sources of protected lifetime income are something that many retirees consider an important piece of their retirement strategy. But most don’t know where to get them. As their financial professional, consider offering a fixed or fixed index annuity as a way to convert a portion of their portfolio into a source of protected lifetime income.

Fixed and fixed index annuities also offer a variety of options for predictability and growth potential – especially for clients who might be concerned about those unknown elements that may impact their retirement.