Do your clients worry about running out of money in retirement?

10 Apr 2019

You may have noticed that more of your clients are increasingly fearful that their money’s going to run out after they’ve stopped working and so they’re hesitant to spend their hard earned savings.

This generation of people approaching (or already in) retirement are feeling the pressure. Will their hard-earned savings last the distance?

A perfect storm in retirement income

There’s a culmination of unpredictable factors all working together to deprive today’s retiring clients of their well-deserved sleep.

Many of the old certainties around retirement income have been swept away. The new era of flexibility has moved much of the risk to the individual, and previous guarantees are gone. Defined Benefit pensions are dwindling and annuities are no longer the obvious option.

The comfort of a reliable income has given way to a new era of choice. And choice means decisions and the fear of making the wrong ones.

Combine these factors with ongoing political instability and turbulent markets, and clients face a worrying combination of increasing uncertainty and personal responsibility. The burden is on advisers to provide answers.

An adviser’s work is never done

Clients now want much more guidance after they’ve retired. It’s no longer as simple as setting up an annuity being the default choice. If you and your client maintain control of their retirement pot, then you’ll be watching that pot for the rest of their life, however long that is. Which is another one of the key issues. The current generation of retirees is expected to spend around 15 years longer in retirement than people did in the 1950s.*

A realistic plan

In an environment where options, risks and life expectancy have all increased, you need to reassure your sleepless clients with some enlightened analysis and realistic post-retirement planning. There are plenty of unknown factors to tackle – investment risk, inflation, longevity and the possibility of unforeseen events.

It’s up to you to gather the facts that are available, combine them with some informed assumptions, identify goals and make a flexible plan. Show your clients what they can afford to do, rather than let them carry on worrying about what they can’t.

7IM’s Retirement Income Service – ground-breaking portfolio management

7IM can support you as you take your clients through the complex process of decumulation, with a streamlined service we think is better than other Centralised Retirement Propositions. It’s based on some serious scientific analysis, incorporating over 50,000 assumptions and real-life data from real clients.

With regular reviews, over time, clients’ money cascades through long-, medium- and near-term pots. This kind of functionality is rare. The system balances maximising investment opportunities with maintaining desired levels of income. It’s a flexible, cost-effective, ‘plug and play’ approach. It should also encourage a better night’s sleep. For you and your clients.

If you’d like to find out more about 7IM’s Retirement Income Service, give us a call on 020 7760 8829.

* Source: Office for National Statistics

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The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.

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