As Boomers Near Retirement, Where Are The Income Specialists?

As Boomers Near Retirement, Where Are The Income Specialists?

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National Underwriter has given considerable ink to the financial needs of baby boomers as they approach retirement. Much of the discussion leads to the same conclusion: Pre-retirees need income planning advice, and so do those who are already in retirement.

This suggests that many consumers soon will need the services of income specialists–people who know how to help retired folk live on the money they have accumulated.

My question is, where is this army of specialists? Yes, some financial planners and advisors do till this field, but I am told their numbers are not exactly legion. This needs to change. Well revisit this point later. First, a refresher on the issues.

In the articles referenced above, NUs writers and contributors have examined the boomer demographic–the 77 million or so people born between 1946 and 1964. They have looked at the boomer lifestyle–diverse, by any measure. And they have enumerated the many retirement funding challenges facing boomers.

These challenges include: the potential for long term care or critical illness events; the uncertainty about Social Security and Medicare; the decline in traditional pensions; the expected “transfer” of trillions of dollars to boomer financial accounts via inheritance, 401(k) rollover, sale of homes, and more; and boomers lack of expertise in managing lump sums of money.

Again and again, experts say a crisis is looming. If boomers dont get on a sound retirement income course, the experts warn, boomers will sink in a quagmire of financial mismanagement. Their golden years will turn dark and cold.

Such dire predictions certainly speak to me. Ive seen more than a few people of my acquaintance make bad financial decisions in retirement, or at its doorstep, that threaten their financial security.

For instance, a well-educated 80-something gentleman in my community recently told me this story. He wanted to “set up something” that would drop x-amount of dollars into his checking account every month. What he bought–on the advice of the “nice young man”–was a deferred annuity. He later reviewed the policy, checking out each provision. The more he learned, the more upset he became. “Thats not what I wanted!” he shouted.

It turns out that what the man wanted was what his friend had–an income annuity. He just did not know the word for the product other than the word “annuity.” Meanwhile, the “nice young man” did not work with income annuities, so he said he did not think to offer one to the nice old man.

This is not the first such story Ive heard, and it probably wont be the last.

Of course, anecdotes do not a trend make. I have also heard people tell of planners who “really did a great job in helping me sort out everything.” Some people swear by such planners the way young parents swear by their pediatricians. It is a passionate engagement, borne of relief, security, and trust.

Still, from talks with many financial services pros, I am coming to the conclusion that such income planning experts are hard to come by. Many, like the “nice young man,” just do not work with income planning scenarios.