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5 Ways to Boost Clients’ Monthly Retirement Income

5 Ways to Boost Clients’ Monthly Retirement Income 5 Ways to Boost Clients’ Monthly Retirement Income

Fidelity Investments’ new Retirement Savings Assessment report found that, on average, American households can expect their monthly income to decline about 28% a month in retirement and nearly four-in-10 (38%) of retiree households say they don’t have enough income to cover their monthly expenses.


Here’s an interactive slide show highlighting five actionable steps retirees and pre-retirees can take to improve their monthly retirement income.


“While there is evidence that Americans are saving more for retirement, our analysis finds that they need to take additional steps to prepare for the future and take better control of their personal economy,” said Kathleen Murphy, president of Fidelity’s personal investing group. "The study underscores the importance of early engagement in the retirement planning process.”


Source: Fidelity Investments

1. Adjust Your Asset Allocation 1. Adjust Your Asset Allocation

Twenty-one percent of those surveyed are invested too conservatively with limited exposure to stocks, based on their current age and planned retirement date. This highlights how many investors have improperly allocated their assets and are losing the long-term earnings potential of stocks.

2. Increase Your Savings 2. Increase Your Savings

Respondents indicate they saved an average of $3,500 in 2011, but most are still not fully benefiting from the tax-advantaged/deferred savings potential of their workplace or individual retirement accounts. This is especially important for younger investors, who have a longer timeframe and more potential for their money to grow.

3. Adjust Your Retirement Date 3. Adjust Your Retirement Date

The average planned retirement age is 65, but delaying full retirement by a couple of years or continuing to work part-time can help preserve assets so they have a better chance of lasting through retirement. This tactic can be especially powerful for Boomers, many of whom Fidelity found are facing a potential drop in retirement income.

4. Annuitize Your Retirement Assets 4. Annuitize Your Retirement Assets

Fewer than one-fifth (17%) of retirees are using an annuity to create a guaranteed lifetime income stream to cover essential expenses, but it can be an important tool to help ensure savings last through retirement – particularly if a retiree lives beyond his or her mid-80s.

5. Tap Into Your Home Equity 5. Tap Into Your Home Equity

Seventy-two percent of respondents own a home and one-third (32%) of homeowners have no mortgage. Through downsizing and expense reduction, this home equity could be harnessed to generate income in retirement.

Also see:

12 Terrifying Retirement Facts Keeping Boomers – And Their Advisors – Up At Night

9 Ways to Keep Clients From Overspending in Retirement

The Five Biggest Threats To Your Clients’ Retirement Nest Eggs

Nearly four-in-10 (38%) retiree households say they don’t have enough income to cover their monthly expenses. Here’s an interactive slide show highlighting five things retirees and pre-retirees can do now to improve their monthly retirement income.

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