Take a flexible approach to retirement income

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Throughout their working lives, your clients have likely been steadily saving, and investing their pension money sensibly to potentially maximise their pot for retirement. But whilst most people keep one eye on the distant future, it’s unlikely that your clients will know exactly what their priorities will be as they get older, or will be able to easily envision how much income their pension pot will provide for them each year. 

Additionally, with people living longer these days, many clients could feel anxious that their retirement savings will run out, or that the value of their pension pot will dwindle to such an extent that their income fails to meet their needs. 
 

Determining a clients’ retirement income 

Of course, your ongoing relationship with clients and your knowledge of their attitude to retirement plays a big part in helping you to assess their income needs. And there are different methods available to encourage your clients to think carefully about their requirements in later life, and determine an adequate retirement income. 

Encouraging clients to compile a list of their outgoings can be a useful first step in helping them to prioritise their spending and calculate their retirement income needs.  

And by separating their regular spending into different categories, you can create a budget hierarchy to determine what essentials they need to maintain a basic standard of living, which outgoings will enhance their lifestyle, and which would be considered luxuries.
 

Considering different approaches 

Once your clients understand their retirement needs better, many still won’t have a clear idea of how much income they can expect from their pension pot, and will seek advice from you to clarify this. In these cases, you may find that your clients approach the question of retirement income in one of two ways. 

1. Some clients will prefer to consider the value of their whole pension pot and how much income they can expect to receive from this, before basing their plans on what they can afford to do in retirement.
    
2. Other clients may have firm plans about what they want to do in retirement and have an income goal in mind to allow them to achieve this.  

As your approach to advice changes with each client – we understand that the option to include flexible choices can be invaluable when planning their annual retirement income.
 

How to support your clients’ needs 

When making plans to cover essential spending, offering your clients the option of a guaranteed income for life through an annuity could be very reassuring. And if clients know the basics are taken care of, they may feel like they can afford to take more of a risk to finance their luxuries.  

Depending on their needs, taking a blended approach can help your clients to maximise their income and achieve their retirement goals. By using a portion of their pension pot to purchase an annuity, they can ensure their minimum income needs are met whilst leaving the rest of their pot invested to benefit from potential growth, also allowing flexible access to cover additional spending in the future. 

To support you with obtaining annuity quotes for a specific income amount, you can request quotes from most providers, including Standard Life, based on your client’s required annual income or the value of their pension pot. Having the option to choose between these different ways to obtain a quote should make it easier for you to plan their retirement income in a way that matches their needs and objectives. 

Find out how the Standard Life Pension Annuity can support your clients in retirement and get an instant quote.