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Retirement income style quiz

Help your clients understand their retirement income style

Now’s the time to start the retirement income conversation with your clients. The first step? Sit with them as they take this short, 10-question quiz. The results can provide clarity and insight into how your clients want to fund their retirement needs, wants, and wishes.
 

What’s your retirement income style?

This assessment is designed to see if you prefer a probability-based or a safety-first retirement income style. What’s the difference? Here’s a closer look at the two styles:

Probability-based thinkers believe:

  • Products offering protected lifetime income aren’t necessary as part of a retirement income strategy

  • The stock market offers superior results for retirement needs, wants, and wishes

  • In general, relying on the stock market will probably work

Safety-first thinkers believe:

  • Products offering protected lifetime income are essential for retirement needs

  • Stock market investments can be dedicated to growth for retirement wants and wishes

  • In general, any risk of running out of money for retirement needs is unacceptable

Step one:
Take the quiz

Question 1:

When it comes to managing your retirement income, pick the picture that best represents how involved you want to be - check A or B.

Question 2:

Which image best captures how you feel about this statement:

I think my retirement savings will probably be enough to cover my fun expenses (like travel) and my essential expenses (like food) for life.

Question 3:

For your "needs" expenses (like eating in) and your "wants" expenses (like eating out), where would you prefer to draw your money from?

From my investment portfolio for both

From my protected income source for my needs and my investment portfolio for my wants

Question 4:

Pick the image that best represents your first retirement priority. (Note that the three "A" images represent retirement needs. The three "B" images represent retirement wants. Pick one "A" or one "B" image only.)

Question 5:

For your "needs" expenses (like eating in) and your "wants" expenses (like eating out), where would you prefer to draw your money from?

Very willing

Not that willing

Question 6:

What's more important to you? Achieving your other retirement goals or preparing for emergencies?

Very willing

Preparing for emergencies

Question 7:

For things like your utility bills and groceries, how much of your income are you expecting from protected income sources such as Social Security, an annuity, and/or a pension?

Question 8:

The longer your retirement, what do you value more in your retirement income strategy?

 

Flexibility

A permanent strategy

Question 9:

Do you worry about the level of sustainable income your assets can generate for your retirement expenses?

No

Yes

Question 10:

How certain are you that you could overcome a severe market downturn in your retirement?

Somewhat to pretty confident

Not that confident

Step two:
View your results

A:

Probability-based

B:

Safety-first

Step three: 
Interpret your score

If your probability-based score is higher than your safety-first score

You prefer the stock market to fund either most or all of your needs, wants, and wishes. But you may also be interested in sources of protected income for some of your retirement needs.

If your score is 5 for probability-based and 5 for safety-first

You prefer a blend of stock market investments and protected lifetime income for your needs, wants and wishes.

If your safety-first score is higher than your probability based score

You prefer protected income sources for either most or all of your retirement needs and a blend of protected/unprotected income sources for your wants and wishes.

Step four: 
Take the next step

Now that you know your probability-based and safety-first scores, work with your financial professional to:

  • Start planning your retirement needs, wants, and wishes. For example, while eating out may be a “want” to some, it may be a “need” to you.

  • Estimate your monthly expenses for each of your retirement needs, wants, and wishes.

  • Calculate your total monthly expenses for your retirement.

 

Once you’ve completed the above, your financial professional can use your income style score and your estimated retirement expenses to help you build a strategy that’s right for you.

  • This may include helping you determine how much to pull from safety-first income sources (such as Social Security, a pension, and/or an annuity) and probability-based income sources (such as an IRA or 401(k) plan.
  • For example, if your total expenses are estimated to be $10,000 a month, your safety-first score is 6, and your probability-based score is 4, you may need to generate $6,000 a month from protected income sources and $4,000 from probability-based sources.

Here’s to funding your retirement needs, wants, and wishes!