When it comes to retirement, the top concern cited by Americans is running out of money.1 In fact, according to a Bankrate Financial Security Index survey, 76 percent of Americans have at least one financial regret, and for many of them, that regret is that they didn’t start their retirement savings early enough.2
As you know, clients who are proactive about planning for their retirement – the earlier the better – tend to be more confident about their financial future and their ability to sustain their desired lifestyle through the end stages. The ability to help them understand how their everyday choices may impact their retirement income goals can be a gamechanger for them, and for your relationship.
iRetire®, a subscription-based BlackRock tool available through the Envestnet platform, streamlines this process. In just a few minutes, you can estimate retirement income and illustrate how decisions to save, spend, and invest can directly impact retirement.
The Gateway To Financial Planning
Whether you’re building a complicated, full-fledged financial plan or one that’s more simplified, the iRetire tool is a gateway to starting the conversation and demonstrating the need for a documented plan. In fact, we consider the iRetire tool to be the step before financial planning – one that can be leveraged with both prospects and existing clients. You run an iRetire analysis, uncover your client’s potential retirement income gap, and then work to address the problem together. As a result, you can:
- Show your clients their retirement income gap in a visual, easy-to-understand format
- More easily uncover additional assets that you weren’t previously aware of and help your clients manage their portfolios more efficiently and holistically
- Offer potential solutions to help close the gap by delaying retirement, saving more, or investing differently
- Help your clients understand and commit to the optimal mix of investments for their needs
Once a plan is in place, you can continue to foster your relationship and demonstrate your value by revisiting the tool on an annual basis. And if at any time your client wants to make adjustments – to their inputs or to their risk tolerance – you can quickly demonstrate the impact of those decisions and work together to decide how to move forward.
You can also use iRetire technology in conjunction with planning tools, like Envestnet | MoneyGuide, which can lead to more in-depth conversations with clients and prospects and more robust financial plans based on complex scenarios.
How It Works
Technology can be complicated, but iRetire isn’t. You can likely master the tool in just one or two client conversations. With a few quick inputs, instantly visualize where your client stands in comparison to their retirement income goals.
For clients still in the workforce – those in the accumulation phase of life –enter their age, current retirement savings, and desired annual retirement income. That information creates a powerful visualization of their current standing in relation to the goal, often illuminating a significant income gap that you can help them close.
With a few simple refinements that change instantaneously on the screen, such as saving or investing differently, you can help clients see which actions they can consider taking to commit to a plan.
For clients who are already retired – those in the decumulation phase of life – enter their age, current retirement savings, and annual Social Security income, followed by any other expected annual income. As a result, you are presented with an annual sustainable income estimate, the ongoing annual income your client is estimated to receive.
Here again, you can adjust the inputs and the risk and immediately illustrate the impact. You can refine the plan by adding in other retirement income or shifting the mix of investments. By selecting “View as timeline,” you will see a bar chart that outlines the estimated income over a 20-year period, breaking down the various components that comprise the annual income amount.
By toggling to a portfolio view, you will see a graph depicting the drawdown of the portfolio out to age 85, showing the client’s purchasing power based on their estimated portfolio value. This represents the potential cost to annuitize, helping you talk through the concept of annuity-based income with clients.
This enables you to illustrate the impact of overspending, the benefit of conservative budgeting, and the value of purchasing annuities to help close the gap. For many clients, this can help them realize the benefit of your guidance and expertise.
In both scenarios, you have the option to convert the plan to a client-ready proposal or to generate a PDF report of the client’s iRetire plan to share with them.
Get Started Today
iRetire technology can easily become a part of your practice, incorporated into the early conversations you’re already having with clients and prospects. Use the analysis to understand their gaps and work together to find the optimal solutions to help meet their needs, as you take steps together toward financial confidence.
To learn more about how you can leverage our financial wellness platform, including BlackRock’s seamlessly integrated subscription offerings, contact your Envestnet sales team at 855-769-0806.
1. “Going Broke Remains Top Concern in Retirement: Survey of CPA Financial Planners,” AICPA.org, last modified February 14, 2019, https://www.aicpa.org/press/pressreleases/2019/going-broke-remains-top-concern-in-retirement.html.
2. Kelly Anne Smith, “Americans say their biggest financial regret is not saving for retirement sooner,” Bankrate.com, last modified on May 29, 2019, https://www.bankrate.com/banking/savings/financial-security-may-2019/.
The information, analysis and opinions expressed herein are for informational purposes only and do not necessarily reflect the views of Envestnet. These views reflect the judgment of the author as of the date of writing and are subject to change at any time without notice. Nothing contained in this piece is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type.
iRetire technology is offered exclusively for financial professionals, for use alongside clients.
IMPORTANT: The projections or other information generated by the iRetire tool regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.