Live Long and Prosper


spock

The financial concerns of retirees were recently captured in a poll by LIMRA, a worldwide research, consulting, and professional development organization.

The top concerns included:

  • Healthcare: 85 per cent expressed concern about covering healthcare costs

  • Emergencies: 81 per cent expressed concern whether or not they would have enough money to pay for the unexpected

  • Increased housing costs: 45 per cent expressed concern about their ability to pay for housing

Ultimately these concerns point to the same issue they always have; nobody wants to run out of money in retirement.

I recently had the opportunity to experience this shift first hand as I helped a couple transition from the accumulation of wealth to planning for its distribution and depletion. There’s an increasing need to ensure people continue to receive income throughout their retirement years. The focus is no longer on growth but on security and this is having a profound impact on the way the markets are beginning to function.

This generation has worked very hard to save for retirement throughout their career, but due to a changing pension landscape and market fluctuations, some are unsure how to move forward. They’re looking for solid retirement income planning and advice to guide them through the shift.

Since the market downturn in 2008, many people who are nearing retirement lack confidence in the markets and their investments. Despite this skepticism, they are looking for something they can believe in and solutions that put them back in the driver’s seat.

A recent study found that 97 per cent of retirees want to remain financially independent.

So what’s my number one piece of advice for a retiring client?

Forget about growth and lock in your income.

As a financial advisor who works with an insurance firm I have access to a unique blend of guaranteed income products that banks and other strictly investment based firms can’t offer. Guarantees are a good thing when you are trying to secure your income and build your budget for the long term, even if it means you sacrifice some growth up front. What is more important short term growth or long term income? Most retirees will agree that the longer and more accurately they can project their income, the better.

Ask your bank advisor what kind of guarantees there are on your RRIF income if the market takes a turn and he’ll likely try to crawl under the desk. On the other hand ask an insurance advisor about those same guarantees and he will beam with pride as he explains the structure of a life annuity or the principle guarantees on a segregated fund.

Commander Spock would agree. In the Star-Trek universe Vulcans live exceptionally longer lives than Humans. I’m pretty sure that if Spock were to retire to Canada he’d take out a Life Annuity with an insurance firm before he’d be willing to risk any of his gold-pressed latinum in a standard RRIF.

Be like Spock, Live Long and Prosper and invest in Annuities….

For more information on retirement income planning write to themeekonomicsproject@gmail.com

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