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Five client questions advisors need to answer

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A recent report by LIMRA found that advisors don’t always address critical risks that could affect their clients’ retirement. Less than half of retirees surveyed said their advisors advised them on when to retire, planning expenses and income during retirement, how assets should be withdrawn and planning minimum distributions.

“While most advisors are very conscientious about managing their clients’ assets in retirement, many may not address some of the key issues that could jeopardize their clients’ long-term financial well-being,” Marie Rice, corporate vice president and director of LIMRA Retirement Research, said in a press release.

Researchers identified five questions advisors and clients should answer while planning for retirement:

  1. When should I retire? According to LIMRA, people typically make this decision five years before retirement. The report recommends pre-retirees plan for health care costs and current financial obligations, as well as building a back-up plan to protect against the affects of an unforeseen layoff or illness.
  2. How do I plan for my expenses and income? You’re probably already working with clients on identifying the expenses they’ll face in retirement, but it’s important to plan for possible unplanned expenses, as well.
  3. Which funds should I draw from first? While most people understand the importance of diversifying their portfolio, tax implications and long-term strategies can confuse people trying to convert those savings into income, according to the report.
  4. What required minimum distributions do I need to perform and when? It’s important to know which investments have minimum distribution requirements and when clients need to start taking them, in order to avoid penalties and minimize the tax burden.
  5. What risks should I plan for when I retire? Among the risks identified by researchers that advisors can help clients plan for are longevity, illness, inflation and market volatility.


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