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"In the old days, you would plan for retirement and then when you got there, that was it," says John Oliver.
"Now with increased life expectancy, there are a lot of opportunities for post-retirement planning," says Oliver, who is vice president, advanced markets at Transamerica, Los Angeles.
The concept of post-retirement planning can mean a couple of different things, experts say. On the surface, some may feel this topic is of concern only to retirees. Continued planning throughout their retirement years can lead to an extension of the lifestyle retirees became accustomed to during their working years.
From another perspective, post-retirement planning can be viewed just as any other time period of one's life, such as college planning, early career planning, family planning and retirement planning. Planning for the post-retirement years is something that should not be set aside until one retires, many experts agree, but rather should be considered as part of one's life plan.
"People are starting to think about post-retirement planning a lot earlier than their retirement date," says Dawn Fredette, second vice president, retirement and investment services at Travelers Life and Annuity, Hartford, Conn.
Planning for retirement has become a huge part of almost every American's financial plan. Technical terms like 401(k) and IRA have become familiar additions to everyday language. Financial planners now cater to much more savvy investors, who are much better informed than ever before on tax laws and planning techniques.
"Today," continues Fredette, "these people are very, very educated, and they are making educated decisions."
Nonetheless, there is still a large segment of the population that is entering retirement who may not have given much thought to post-retirement financial planning. For these people, retirement is just the beginning of a new period of their lives.
"With the longer life expectancies, people that retire today are starting new businesses, and they're inheriting large sums from their parents," says Oliver.
Fredette agrees, saying that longer life expectancy means "most people will be in retirement for a long time."
It is this extended lifetime that has retirees raising more questions. Many are asking: What's next? What will happen with Social Security? How long can I reasonably expect to live? How will the new tax laws affect me? Will I need long-term care, and how much does it cost?
"One issue for retirees is how to maximize their income," says Oliver. "With the longer life expectancy, people want to be sure they have enough income to survive on."
Fredette concurs. "People insure their car, they insure their house, but what happens if they live too long? What if their assets run out?"
One solution, says Fredette, may be annuitization. "People haven't focused on their longevity as a risk," she continues, "and planners need to spend a lot of time educating these clients."
Because of the "threat" of longevity, people need to be sure their assets don't come up short, says Fredette. "Annuitization insures against that risk."
For planners in the field today, "there is a huge opportunity for planning with these clients," says Oliver.
With a constantly changing environment, people will need expert advice on issues such as: the new minimum distribution rules for qualified plans and IRAs, the recent estate tax reform legislation, and information regarding long-term care planning.
