Choosing the right fixed index annuity (“FIA”) with the right income rider for your situation requires that you first choose the right individual who specializes in this unique retirement income planning strategy. The conclusion of the post, Retirement Income Planner Key to Success When Investing in Fixed Index Annuities, was that the person you choose should be a professional retirement income planner.
What is a retirement income planner? Before answering this question, let’s start by stating what a retirement income planner isn’t. Although it’s possible that the same individual may perform both services, a retirement income planner isn’t the same thing as a retirement planner.
Simply stated, a retirement planner develops and manages strategies for building assets that are intended to be used for retirement. Retirement planners practice retirement asset planning, As defined in Retirement Income Visions™ Glossary, Retirement Asset Planning is:
The process of planning for the accumulation of sufficient assets to be used for retirement and “spending down” of those assets during one’s retirement years.
Retirement asset planning is all about accumulating assets. It begins when assets are earmarked for retirement, either by (a) the nature of the assets, e.g., qualified plans including 401(k) plans, or (b) dedicating nonqualified assets for retirement. By definition, retirement asset planning ends at retirement whether or not there are sufficient assets that will last for the duration of retirement.
Retirement income planning, on the other hand, begins during the asset accumulation process and ends at death. As defined in Retirement Income Visions™ Glossary, Retirement Income Planning is:
The process of planning for a predictable income stream from one’s assets, that when combined with other sources of income, is designed to meet an individual’s or family’s financial needs for the duration of retirement.
Retirement income planning is practiced by retirement income planners. Per Retirement Income Visions™ Glossary, a Retirement Income Planner is:
An individual who is professionally trained, licensed, and experienced in developing and managing strategies for creating and optimizing retirement income to meet one’s financial needs for the duration of retirement.
“Income” and “duration of retirement” are the key words and phrases, respectively, in this definition. In today’s low-interest rate environment, it’s difficult to find investments that will generate decent income streams that will meet one’s short-term financial needs, let alone for the duration of retirement.
Robert Klein, CPA, PFS, CFP®, RICP®, CLTC® is the founder and president of Retirement Income Center in Newport Beach, California. Bob is also the sole proprietor of Robert Klein, CPA. Bob applies his unique background, experience, expertise, and specialization in tax-sensitive retirement income planning strategies to optimize the longevity of his clients’ after-tax retirement income and assets. He does this as an independent financial advisor using customized holistic planning solutions based on each client’s needs and personality.