Between record-high inflation, recession fears, and the ongoing threat of Social Security benefit cuts, many Americans are worried about their nest eggs in the current economic environment. 

These nest eggs may include any combination of 401(k)s, 403(b)s, individual retirement accounts (IRAs), Roth IRAs, fixed annuities, variable annuities, certificates of deposit, health savings accounts (HSAs) plus Social Security benefits, and possibly a pension.

These options provide diverse retirement income streams, which is a good thing. They also make it more difficult for financial advisors to create a rock-solid retirement income plan for clients.

Let’s look at some factors that add to retirement income planning complexity and how financial advisors can use technology to optimize clients’ retirement income strategies, even when personal circumstances and economic outlooks change.

Today’s Retirement Income Planning Is Complex

Many of your prospects and clients probably have a limited view of retirement income planning the first time you meet. In fact, a large percentage of the population’s primary retirement income strategy is to claim Social Security benefits and then dip into their 401(k) as needed.

The big problem with this strategy is that it doesn’t consider the complex interdependencies between different retirement income sources. For example, how much income is spendable versus how much is needed for taxes? How do tax rules differ between income types, and which tax-free income types become taxable when combined?

Today’s pervasive DIY mentality has infiltrated retirement income planning. Many people think they can create a viable strategy themselves with the help of some commercial software or a bit of input from a financial advisor who specializes in tax-efficient retirement income planning or Social Security claiming strategies.

Again, this approach misses the big picture and interrelationships that can significantly impact a retiree’s actual spendable income. 

Financial advisors must help prospects and clients shift their perspective away from a single nest egg to a multi-level retirement income strategy. This strategy, when orchestrated with the help of an advisor who knows how to use the right technology, can add thousands of additional dollars throughout their retirement.

How to Deliver Smart Strategies and Increase Spendable Retirement Income

Today’s financial advisors are turning to fintech to demonstrate value to their clients and help them optimize their retirement income, including tax planning and Social Security claiming.

Here are four ways technology allows financial advisors to help clients make intelligent, informed retirement decisions. 

1. Pick the right software.

Just tax planning or just Social Security optimization solutions won’t cut it. You need an integrated solution that works across applications to create a holistic view of your client’s retirement income strategy.

2. Say “no” to manual calculations.

Automation is essential so you can easily calculate how a change in one income source will impact other income sources or tax responsibilities.

3. Say “yes” to stress tests.

Stress test the strategies against current economic stressors like inflation and possible Social Security benefit cuts to determine whether your client’s strategy will hold up.

4. Make the strategy — and the outcomes — visible and easy to understand.

Graphs, charts, and other visualizations help your clients understand how one decision can interact with a seemingly unrelated decision to either cost or save them money — and how much.

Look Beyond the Retirement Income Nest Egg

In today’s uncertain economic climate, your clients seek guidance and reassurance that their retirement income strategy can weather economic storms. 

Fintech solutions, like Covisum’s suite of retirement income planning software, empower financial advisors to deliver personalized, integrated, comprehensive strategies and test them against stressors like high inflation, down markets, Social Security cuts, long-term care needs, and death. 

Start your free 10-day trial of the entire Covisum suite and discover why more than 20,000 financial advisors trust Covisum to grow their business and delight their clients.


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