The question is are your clients approaching retirement with confidence or uncertainty?

Traditional investment rules change as your clients transition into retirement. Accordingly, future retirees need to plan carefully to address issues such as:

Longevity Risk With increased life expectancy comes the fear that people will outlive their retirement savings. Your clients may have to fund their retirement for 25 years or longer

Inflation Rising costs of goods and services can erode your clients′ savings

Sequence of Returns Poor market returns due to market volatility early on in retirement can deplete retirement savings faster than your clients may realize

Liquidity Needs Your clients may need to maintain access to savings to address retirement goals or unexpected health care expenses and/or other emergencies that could inflict a financial burden

Behavioural Risk A 2005 study of investor behaviour revealed that during down markets, investors make wrong decisions 75 per cent of the time*. Market volatility can cause investors to make rash decisions that can undermine their financial plan

Estate Aspirations Many of your clients may want to leave an inheritance for their children and the size of the inheritance will have a direct impact on the amount of money they can spend in retirement

A Shift in Thinking

Research shows that asset allocation strategies alone are inadequate to ensure that retirees savings will last!**

The financial services industry has long been focused on helping clients accumulate the assets they′ll need for a comfortable retirement. However, de-cumulation or the draw-down of retirement assets can be considerably more complex than the accumulation process due to the unique risks that people face in retirement. With the possibility of people living 25 or more years after they stop working, the focus must now shift towards developing a retirement income strategy that can help ensure your clients don′t outlive their savings.

Studies are confirming this trend. A 2005 report that surveyed Canadian high net worth investors in Canada concluded that "The aging millionaire population is shifting financial strategies away from asset accumulation to preservation and income generation***." Advisors who are able to provide comprehensive retirement income strategies may be well positioned to profit from this growing trend.