Income planning outlook for 2010: Prudence now rules
By Warren S. Hersch
"Many of the success stories we enjoyed in 2009 revolved around income guarantees, especially riders on variable annuities that allow clients to capture market gains while also providing a floor when equities turn south," says Benjamin Hill.
"Although VA investment subaccounts were negatively impacted by the markets this past year, clients' incomes did not diminish—in some cases they even rose—because of the product guarantees."
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Hill, a financial planner and principal of Hill Financial Advisors, Westlake Village, Calif., says that VAs offering guaranteed minimum income and withdrawal benefits will maintain a prominent place in income planning strategies in 2010. Because individual retirement accounts suffered such severe losses during the economic downturn, clients increasingly are turning to…click here for entire article
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Results of the previous reader poll
Our question was:
What is the primary source of retirement income, after Social Security, on which the majority of retirement-age clients retiring in 2010 will depend?
Our readers said:
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58%: Employer-sponsored retirement plan or pension plan |
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33%: Income from continued employment or phased retirement |
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8%: Traditional individual retirement account |
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0%: Roth individual retirement account |
Note: These results reflect the views of readers who elected to respond to our poll question.
The numbers do not add up to 100% due to rounding.
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Where's the rollover? Where's the conversion?
by Ron Merolli
"Where is the rollover and conversion market?" Just about everywhere. There are very few clients who don't have some qualified account somewhere, whether it's an individual retirement account, 401(k), or something else.
So, asking customers about this can potentially uncover business opportunities.
Furthermore, with recent positive changes in the law, particularly with the conversion opportunity to Roth IRAs in 2010, rollovers and conversions deserve special focus for the next few years.
First, here are some reasons why it makes good sense to roll over IRAs to qualified plans, such as 401(a)/(k), 403(b), and 457(b) governmental plans. Creditor protection/bankruptcy for…click here for entire article
Ron Merolli, JD, is director of advanced sales for National Life Group, a trade name for National Life Insurance Company, Montpelier, Montpelier, Vt. His e-mail address is [email protected].
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Boomers postponing retirement, association finds - Financial advisors report that the recession is forcing some clients to keep working longer than they want — or return to the job market. About 40% of the clients polled said they have had to…click here for entire article
Consumers less confident about retirement: study - by Warren S. Hersch - New research shows that consumers are more nervous about retirement costs— but that active efforts to plan does relieve some of the…click here for entire article
Majority of employees kept the match, survey finds - About 77% of retirement plan sponsors say they have continued to make match contributions despite the recession — and 4.7% say they have increased their…click here for entire article
Retirement income: half of retiree assets in drawdown - Almost half of all financial assets held by households in the 65-and-over category can now be considered in retirement income "drawdown" mode, according to…click here for entire article
Educator blasts proposed act's fiduciary responsibility section - by Arthur D. Postal - The U.S. Securities and Exchange Commission should study investment advisors and broker-dealers carefully before trying to revamp fiduciary responsibility rules, according to…click here for entire article
Internal Revenue to nonprofit employers: relax
Employer's fiduciary responsibility may increase, says advisory opinion
Bill calls for 401(k) income estimates
Pension benefit agency to update retirement age table
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| For advisors and registered reps |
Labor withdraws investment advice regulations - by Allison Bell - The Employee Benefits Security Administration, an arm of the U.S. Department of Labor, has withdrawn regulations issued in January that would implement the investment advice provisions in the Pension Protection Act of 2006. Regulation supporters are condemning the…click here for entire article
Why boomer retirees should consider this - by Thomas F. Streiff - Many people are aware of Treasury Inflation Protected Securities, but they are unaware of how well they work for retirement income. If comparing these securities to equities, it's true that…click here for entire article
Bringing in new clients from referrals - by Warren Hersch - Many advisors continue to use ineffective and even aggressive techniques to try to pry referrals to friends and colleagues from clients. As a result, they not only fail to get the referrals; they risk undercutting the hard work that…click here for entire article
Help for Roth IRA conversions
The new investing realism
Retirement plan advisor groups to combine operations
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- The number of U.S. companies considering closing or freezing their defined benefit pension plans has almost tripled since 18 months ago.
- 31% are more likely to consider closing their plans today, compared to 11% in 2008.
- 50% are more likely to consider freezing their plans to existing participants, up from 17% in 2008.
Source: Survey of 153 large U.S. employers with pension plans by Hewitt Associates Inc., Lincolnshire, Ill.
Click here to see more survey results
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