Retirement Income Planning Wave Rolls Ashore

“Advisors are actively preparing to help an aging client base shift from asset accumulation to distribution,” says Marty Willis, executive vice president of Fidelity Investments Institutional.

About 43% of the survey participants’ clients are retired or are 5 years away from retirement, and 29% of advisors expect their firms’ retirement income planning business to at least double over the next 5 years, the Fidelity Investments Institutional researchers write.

Many financial services firms have been working for years to prepare for the looming shift to income planning strategies, from wealth accumulation strategies. Fidelity Investments Institutional has, for example, put together a team of retirement planning specialists and developed an income planning workbook.

Some demographers have been anticipating the coming flood of baby boomer retirements since the 1950s, and a few life insurance company marketers have been thinking about the effects of the aging of the boomers for nearly that long.

But a working group at the Employee Benefits Security Administration, an arm of the U.S. Department of Labor, helped crystallize concerns about boomer retirement income planning in 2001, by publishing a report on a hearing that repeatedly addressed income planning problems.

“It is a very complicated decision to figure out how much to take out each year, and it does expose [retirees] to this risk of outliving their resources,” said Alicia Munnell, a Boston University pension economist.