Helping Baby Boomers with changing retirement needs

As the Baby Boomer generation enters retirement, financial professionals are experiencing a sea of change in client expectations. Long focused on accumulating assets, clients are increasingly seeking strategies that convert savings into income.

This transition may require some adjustment for financial professionals who have spent decades focusing on savings and investment strategies for long-term growth. It starts by understanding the nature of Baby Boomers’ concerns about retirement income, and then looking for opportunities to adopt new financial products and strategies that ensure your practice continues to meet their needs.

Guaranteed income is a major concern Baby Boomers face greater financial challenges than previous generations. Many are carrying mortgages into retirement, while others are still supporting their adult children and even elderly parents. On top of these challenges, lifespans are increasing. On average, 65-year-olds today are expected to live to age 85 and about one out of every four will live past age 90.

With longer lifespans come increased lifetime costs for housing, day-to-day expenses and, especially, health care. Looking ahead, clients need help developing a retirement income plan that will support their desired lifestyle — and they want to eliminate as much uncertainty as possible from that plan. In a recent study from the Insured Retirement Institute, 41 percent of Baby Boomers said that guaranteed monthly income was the single most important trait they looked for in a retirement investment.

How fixed indexed annuities help address client concerns. Given strong client interest in guaranteed income, financial professionals should examine how specific products and financial strategies can help meet that need. Fixed indexed annuities (FIAs) can complement other tools in a retirement income strategy, including 401(k)s, IRAs and Social Security benefits.

FIAs provide guaranteed income in retirement through a unique design that offers a combination of growth potential and protection from market risk. The contract earns interest that’s tied in part to the growth in one or more stock market indices. Interest income rises as an index increases in value. But when the index is down, the contract’s Accumulated Value is protected from market loss.

This combination of growth plus protection can instill confidence in clients concerned about having enough savings to support their retirement lifestyle. Additional sources of guaranteed income in a retirement plan can also provide greater flexibility for investing in other assets, which can help further address longevity risk, create a legacy or provide a cushion against higher-than-expected medical bills or other surprise expenses.

This information is brought to you by Athene — where innovative annuity solutions and unique interest crediting strategies are powered by unconventional thinking.