Broker Check

4 Steps to Help Your Clients Plan for a Successful Retirement

October 18, 2022

A lot of retirement planning focuses far more heavily on the accumulation phase than the distribution phase. However, having the right plan for distributing those funds throughout retirement is arguably far more important--no matter how much your client has saved.

Traditionally, financial advisors have limited retirement planning to the 4% rule, which says if retirees live off 4% of their investments, their money is likely to outlast them in retirement. To counter worries about running out of retirement funds with distributions that high, some advisors set “safe” distribution rates as low as 2.8%.

However, such oversimplified rules don’t account for critical risks related to market declines as retirees start withdrawing from their portfolios in the early years of retirement such as:

  • The sequence-of-returns risk and longevity risk
  • The risk that investors could adversely affect their savings by selling assets at an inopportune time in response to market turbulence or other unforeseen events

Failing to account for these risks can produce unexpected and unintended outcomes, including running out of money partway through retirement.

Thanks to a tool called NextPhase, financial advisors can generate customized retirement income distribution plans for investors nearing retirement. In this executive brief, we’ll discuss how you can help your clients manage retirement risks using NextPhase so they can enjoy the retirement they deserve.


One way to set your clients up for a more successful retirement is by segmenting their funds into a series of “buckets” based on when they’ll need to make withdrawals. For example, money they need early in retirement may require more conservative investment strategies to protect it from volatility. However, retirement could last decades. Leaving funds that will not be withdrawn in the short term in a conservative investment vehicle for 20 or 30 years misses a great deal of growth potential. Those funds could go into relatively riskier investment vehicles, such as stocks, since they’ll likely have enough time to recover from any near-term market shocks long before they need to take those distributions. The trick lies in having the right funds in the right place at the right time to maximize potential gains and minimize risks.


As early as five to seven years before retirement, clients should be thinking about how they will turn their nest egg into a steady, dependable source of income over the coming decades and consider:

  • The need for guarantees                          
  • Risk tolerance                                       
  • Emergency reserves
  • Legacy

For other expenditures in categories like health and luxury, advisors have the leeway to dig deeper.

During that time, it’s essential to develop a comprehensive strategy that details a client’s expectations for how they’ll spend their money during retirement. Their income is a key factor in determining their standard of living later in life. Maintaining that income over the long term requires strategic planning that can easily be done using NextPhase.


For most retirees, the decision about where to put their retirement savings isn’t an all-or-nothing, either/or scenario. But that doesn’t mean the right mix of investments is obvious. As baby boomers approach retirement in large numbers, they need an effective and tangible plan to protect, grow and distribute the retirement savings they have accumulated. Financial advisors who can provide these services and give a clear visual of the projected plan at various points in time will have an opportunity to help more retirees plan effectively for long, happy retirements.

NextPhase allows advisors to create a straightforward illustration of retirement income distribution in five-year increments. Providing this level of clarity gives clients peace of mind about the integrity of their plan from day one and makes the entire planning process more collaborative.


Financial advisors can illustrate income distribution strategies using general financial planning software, but the process can be complicated. What’s more, most general financial planning programs have, like the planning industry, tended to be more focused on accumulation than distribution.

The NextPhase platform equips advisors with a scalable and repeatable system to effectively serve this market.

After establishing the plan, it’s simply a matter of letting the plan do its job and meeting with clients as needed to adjust it, if necessary.

The existence of a trusted plan and the ability to track its performance helps manage the emotional aspect of investing for many clients. In times of volatility, the process helps keep clients invested and unworried about the market, keeping both clients and advisors focused on activities that produce positive results.

Managing risk throughout retirement requires a process. The ride can be bumpy, but the ability to provide clients an upfront plan that lays out their income throughout retirement offers peace of mind for them. Doing this particular task efficiently and well can be a competitive advantage for advisors in an increasingly crowded marketplace.

If you are interested in discussing any of these topics in more detail, contact Iron Point today! I always enjoy speaking with like-minded individuals.