Lesson 7 Quiz Flashcards
Step 3 - Retirement Income Planning Process
- The client must assist the financial services professional in creating a list of her expected first-year retirement expenses.
- The client must categorize her expenses.
- The client must be taught to use a software application to calculate expected aggregate future retirement expenses.
The engagement letter should address what?
What is taking place in the plan, and what they will be talking about.
An engagement letter is intended to inform a client as to the scope, fees, and responsibilities of the parties in regard to retaining financial services professional to provide retirement income planning services.
An advisor is helping a client prioritize and visualize retirement. What should they help her do?
- Think how they visualize retirement
- Prioritize “go-go; slow-go; and no-go years”
- Software that will help the client formulize goals.
What is in the Needs and Savings Analysis Step 5?
- Life Expectancy (need to know how long to plan for)
- Projected investment return (market performance)
- Inflation
How can we best define “decumulation phase risk tolerance”?
- A client’s tolerance for the risk that has not been planned for if they become disabled or in the hospital.
- A client’s tolerance for the risk that retirement assets will be depleted prior to the end of their life.
Structured systematic withdrawal approaches (examples)
- Bucket Approach
- Age-banded approach
- Essential versus discretionary approach, or flooring.
Speaking with a client about Retirement Income Planning could involve?
- Securing demographic and qualitative data from the client.
- Having them complete a risk analysis survey
- Securing back up documentation “trust but, verify”
Example of systematic withdrawal strategy, that converts retirement assets into income?
Fixed distribution amount adjusted for inflation.
Provisional Income?
Sum of taxpayers adjusted gross income, tax exempt interest, and half of his or her SS Benefit.
