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How to Help Clients Draw Down Retirement Assets: Advisors' Advice

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When clients approach or enter retirement, their needs change in terms of cash flow, savings and investments. As older clients enter this phase — decumulation of assets — advisors usually have more and different types of assets and issues to handle than they did during while the client was accumulating assets. Indeed, retirement expert Moshe Milevsky has said that it is “an expensive and elaborate process” and that advisors should charge more in this phase.

In the early years of building a retirement portfolio, clients are focused on investment growth and not on drawing down (unless for a specified event). This means advisors, who often only see a part of a client’s income stream, will have to organize how clients will best need to draw down from savings, contribution and benefit accounts, Social Security, home equity and other financial resources. to determine how best to work out what is right for the client’s needs. Tax implications also must be considered.

We asked members of the Financial Planning Association and XY Planning Network how they deal with the decumulation of client accounts. We wondered how advisors moved their retiring clients into this decumulation phase, what if anything had changed, and whether they charged clients differently. In the gallery above are many of the responses we received.