Boomers Behind The Next Megatrend: Retirement Income Planning
“Retirement income management will be a megatrend,” said John David Davenport at a seminar here.
The numbers alone are huge, indicated the chairman of Davenport Financial Group, Oklahoma City.
For instance, in 2001, all sources of assets for the retirement market equaled $10.69 trillion, he said, citing data from the Employee Benefit Research Institute, Washington, D.C.
Most of those assets ($8.3 trillion) were in employer plans, but the variable annuity industry has a role in this market, too, he said. Specifically, he said the VA industrys contributions will be strong in the areas of new product innovation and advisory services.
Davenport spoke at a panel here at the annual meeting of National Association for Variable Annuities, Reston, Va. The discussion zeroed in on workers need for retirement income planning education and advice.
Current employees, especially boomers approaching retirement, want to learn about income planning so they can manage their assets better, said Ralph Marsh, chair of the Deferred Compensation Board of the City of Houston.
“We have 18,000 employees approaching retirement, and their assets are approaching $400 million. We want to be sure it [the money] is properly managed, so they dont run out of money in their retirement years.”
The employees want that, too, he added. “They desire knowledge, so they can manage their assets.”
There is a “huge retirement wave” coming, he said. For example, in 2005, “about half our workers could retire at any time.”
Also, employees have said they need help with things like risk management, taxes, investing and allocation, employee benefits, and estate planning, Marsh explained.
In view of that, “we wanted to hire retirement counselors to provide employees the information and advice they need, free of charge,” he said.
His office did that, hiring Certified Financial Planners and Certified Retirement Counselors as salaried employees of the plans in-house retirement planning and financial counseling service.
In the next 5 years, those who package advice or education with innovative solutions to retirement income will have high success, predicted Davenport of Oklahoma City.
The reason? “People will have to make decisions about their money, sooner or later,” he said.