If you’re in the middle of retirement planning, one of the risks you may want to consider is longevity. It’s a unique factor. It impacts everyone, it is impossible to forecast, and it changes over time with improvements in medical science.
It was also a major topic covered at the RIA LABS webinar, Fee-Based Insurance & Annuities, last Thursday.
At the webinar, sponsored by Jackson, and co-sponsored by Allianz and Corebridge Financial, experts from various firms talked about retirement planning and fee-based annuities.
Chuck Failla, founder and CEO of Sovereign Financial Group and moderator for the panel, said he sees lots of people outliving their money.
“The good news is you're living longer,” Failla said. “The bad news is you're living longer, at least from the perspective of your finances. If you're not doing your own retirement planning, you're probably not going to have the kind of retirement lifestyle you're going to want.”
Failla adds planning for longevity as early as possible will benefit in the long run.
Learn How to create a longevity plan here.
“You don't want to come to that conclusion in the 14th year and you're like, ‘Wow, I feel pretty good, but I only have a year’s worth of income left,’" he said. "You don't want to forecast that well into retirement. Ideally, you want to forecast that well before retirement or when you're in retirement.”
Experts also discussed the evolution of fee-based annuities, which have gained an unfair reputation in recent years.
“One of the reasons for that is they were really expensive and one of the reasons is because [advisors] were banking in on 5%, 8% or 10% commissions,” Failla added. “If you have that much of a commission, yeah, that that's going to be an expensive product for the client.”
He explained that with commission-free annuities, commissions are stripped away and costs come down, which makes it a win for the client. It allows advisors who use an advisory fee to place their fee on top and have it be less expensive for the client. Advisors can also move in and out of such annuities.
“It opens up options, creates that great win-win situation for both the client and the advisor, and it also makes it a lot easier to manage them,” Failla added.
He said those who are looking to go RIA, or those who are RIA but aren’t aware of all the different annuities and products that are offered, will benefit from listening to the recording of the webinar.
Click here for a recording of the webinar.
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