I’ve been educating everyday Americans about the Investing for Income model for more than two decades now. To this day, whenever someone suddenly “gets it”, it’s like a lightbulb suddenly pops on over their head, and they start to wonder why their own financial advisor has never explained this strategy to them before.
Part of the reason is that many financial advisors don’t have the knowledge to offer income-based strategies. As a result, they speak more favorably and knowledgably about conventional growth-based investments built mainly around stocks and mutual funds. That’s understandable.
Like many investors now in or nearing retirement, many brokers and financial advisors first got involved with the stock market in the 1980s and 90s, during the best long-term market cycle in our nation’s history. Back then, the markets were much more favorable to growth-based investment strategies, and as a result, Wall Street was touted as the only game in town.
However, the game has changed dramatically since that time, both in terms of the markets and the needs of Americans who first began investing 30 or more years ago. If you’re one of them, you have moved on from the “growth and accumulation” stage of retirement planning to the “income” stage. Consequently, it may now also be time to move on from an advisor still married to a conventional growth-based business model, and find one who specializes in generating retirement income.
Increasingly, Baby Boomers across the country are realizing this for themselves and, as a result, the ranks of financial advisors and Income Specialists who specialize in income-based strategies are growing. It will continue to grow along with the demand, but for now, the number of retirement income planning advisors nationwide remains relatively small. In fact, that was the whole idea behind creating the Retirement Income Store: to establish a resource for helping everyday investors nationwide find a retirement income financial advisor near them—and exactly the right advisor for them!
What Do Our Income Specialists Have in Common?
One of the main things The Retirement Income Store’s Fixed Income Specialists have in common is their emphasis on investor education. They work with you to help you calculate and determine your retirement income needs based on your individual goals, and they teach you how to help avoid costly mistakes that could jeopardize them. Most importantly, they can also help you fully understand the Investing for Income model and what makes it such a sound, practical approach for investors in or nearing retirement regardless of market conditions—and even in a challenging interest rate environment like the one we’re in now. That understanding is crucial to forming the kind of relationship a retirement income specialist aims to have with his or her clients. That means a partnership in which you and your advisor work together with a clear understanding of your individual goals and an agreed-upon vision for how to achieve them.
That partnership is ongoing, and it accounts for changes in your own life and circumstances. It also anticipates market trends that might call for modifications to your strategy. That could mean a strategic change designed to help reduce your potential investment risk, or to take advantage of a new opportunity to increase your income. Note that I said “income” and not return, which is a distinction that illustrates one of the core concepts of the income model. That is the understanding that total return is a sum of two things: income and growth, as illustrated in this simple formula: TR=I+G. The income portion comes in the form of interest and dividends, while growth is measured in capital appreciation. Retirement Income Planning can help you understand why shifting your strategic focus from growth to income is a more practical approach to investing once you’ve passed the growth and accumulation stage of life and have entered (or are nearing) the retirement income stage.
Another important thing that distinguishes our Retirement Income Planning Specialists is that they are fiduciaries—a designation not held by all financial advisors. You may be wondering, What is a Fiduciary? The distinction is important because a recent study found that nearly half of Americans falsely believe that all financial advisors are legally required to always act in their clients’ best interests.
Not only is that assumption false, but it can be dangerous for investors who end up taking biased and potentially costly advice from advisors who put their own interests first. The fact is, only advisors who are fiduciaries are required by law to act in the best interest of their clients. By contrast, advisors who are non-fiduciaries are held to the lower “suitability” standard.
Perhaps the biggest difference in these standards lies in the decision-making process. Before making a recommendation, fiduciaries undergo a strict process designed to determine their client’s best interest. Afterward, they discuss it with the client to help ensure there’s no misunderstanding about the recommendation or the fiduciary’s rationale for making it. If that sounds familiar, recall what I said about the kind of relationship an Income Specialist strives to have with his or her clients: an ongoing partnership in which advisor and client work together with a clear understanding of the client’s individual goals and an agreed-upon vision for how best to achieve them.
Now, does all of this mean that advisors who aren’t fiduciaries can’t be counted on to also always act in your best interests? Of course not, but being aware of the difference between the fiduciary and suitability standards can give you a helpful guideline for finding the advisor who is right for you.
How Can I Find Retirement Planning Near Me?
The Retirement Income Store was created as a resource for helping everyday investors nationwide answer the important question: “How can I find a retirement income advisor near me?” The answer is as simple as clicking on the link at the end of this blog. When you do your search through the Retirement Income Store, you already know going in that the advisor is a fiduciary held to the highest standard of service and care. You know further that he or she is uniquely qualified to offer and actively manage a wide range of more conservative and moderate income-based financial strategies on your behalf. That means strategies designed to help protect your principal investment from market volatility and spend-down, generate income at competitive rates of return (even in a challenging interest rate environment), and help enable you to grow your portfolio organically—“the old-fashioned way”—through strategic reinvestment.
Click here to take a Free Retirement Review and schedule a complimentary call with an Income Specialist from The Retirement Income Store® who can help explain the best strategies for you based on your particular situation.
