Retirement income planning has always focused on reaching a wealth accumulation goal by the time of a client’s retirement date, but managing assets after retirement to maximize income is ultimately what’s most important.
That was the subject of Bob Keebler’s recent webinar session
. At a rapid clip, Keebler ticked off pitfalls, problems, and solutions -- why distribution planning is so important, the five-dimensional tax world practitioners must suddenly navigate, the effect of asset allocation on tax minimization and a wide range of other issues.
Because Keebler is so steeped in the CPA world, his approach and perspective is different from that of a CFP, CIMA, or CPWA professional. It's an unbiased approach to optimizing after-tax returns on retirement income.
A4A members can get CFP, CIMA, and CPWA continuing education credit and view the replay
for free. The slides for Bob's monthly sessions are available for $25 a month (annual commitment). You can use the slides in meetings with clients, conducting your own webinars, as well as in in blogs or newsletters you send to clients. Buy it here
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While Bob covered a lot of ground, a major takeaway from the session is the growing need for annuity products targeted to fee-only RIAs and fiduciaries.
Many of the comments below mention a Jefferson National product and a couple of other commenters mentioned other products. I am struck by the dearth of choices.
The income distribution phase of financial life is spreading across thousands of Baby Boomer households daily. Advising this growing segment of potential clients is increasingly important to clients and practitioners.
Diversifying an income stream beyond a securities portfolio — into annuities — is prudent because it mitigates risk in generating retirement income. Fiduciaries will want to offer clients diversified income streams—that is, a stream of income derived from multiple sources. Annuitization of a 15% to 25% portion of a client’s assets in income-generating annuities is being recommended by leading academics, and Keebler is saying the same thing.
For fee-only advisors, advising clients on annuities is a sticky issue because you have to do what’s in a client’s best interest always. You are obliged to recommend a client place assets in an annuity, even if it means you will no longer be able to charge a client for managing those assets.
RIAs working on a retainer basis are well-positioned to deal with this challenge to professional ethics and net income. Retainer-based RIAs, of course, get paid a fixed fee regardless of which products they recommend.
“Jefferson National Monument Annuity is great,” according to one attendee. “Only $20 per month. If a prospect already has a variable annuity, it is much better if they transfer it to JeffNat—usually saving 1-4% per year depending on the cost of the VA they are currently in.”
What strikes me is the dearth of choices. As comments below from attendees show, there are only a small number of annuity products that fee-only advisors can utilize and count as AUM. Clients, ideally, would diversify across different annuities to reduce the risk of a default by an insurer.
It seems like the insurance business doesn’t know fiduciaries exist.
Put another way, fiduciaries, who are supposed to be setting the standard for how financial advice professionals practice, are totally underserved with annuity products, especially since it is arguably imprudent for a fiduciary not to put some assets under management in annuities. It will be interesting to see how long it takes for the insurance companies, product manufacturers, and consultants to fill the void and provide fiduciaries with more choices.
Here are the unedited comments from attendees. Proving once again that you people can never be satisfied, Bob received a 4.5-rating out of five.
- Keebler is an amazing teacher!
- You have some of the best content here...
- Great job Bob. Excellent slide materials, as always. Thank you for the service you provide to advisors.
- Very interesting
- I wished Bob Keebler had time to do some case studies to show how tax planning can help clients increase their income in their retirement.
- Always love Bob Keebler. Never enough time. What I'd love is if we could get more specific. Let's have a webinar that really digs deep on just NUA, just ROTH conversions, just Oil & Gas, just annuities -- etc.
- Too much material for short amount of time.
- Always greatly appreciated...
- He really tried to cover a lot in a short time and did a pretty good job!
- Seemed to be at various levels of expertise - sometimes glossed over the more complex stuff at the same pace as he went through the simpler stuff.
- Really good. Wish it could have been longer to go thru some more case studies to really show the value of tax planning on withdrawal strategies.
- Great info I have not seen organized anywhere else like this.
- Very good
- Great stuff
- Great as always.
- Overall it was excellent but there was too much "heavy" material presented in too short a period of time.
- Very good
- Bob Keebler is so brilliant!
- Excellent. I thought the perspective for using annuities for tax planning was. useful info for an RIA
- My question was not answered regarding paying caps gain vs loss of step up for person who does not need money from annuity but wants to leave the money for heirs
- I wish he would complete his presentation rather than just refer to the remaining "mystery" slides.
- Complex material to cover in 60 minutes. I think the subject needed to be narrowed down for the time slot.
- Good presentation.
- Andy and Bob, I think the comment about the fee-only annuities may pertain to variable annuities offered by Vanguard, Fidelity, etc. which are on our advisor platforms institutional
- JeffNat has 400+ fund choices and includes many good low cost funds from DFA and Vanguard.
- Andy, I think Jefferson National Monument Annuity is great. Only $20 per month. If a prospect already has a variable annuity, it is much better if they transfer it to JeffNat...usually saving 1-4% per year depending on the cost of the VA they are currently in.
- Andy, Check out Lincoln Financial Distributors, they have a RIA specific annuity...
- Jefferson National has a fee-only annuity that RIAs can charge fees.