Many clients know how to save for retirement but not how to turn those savings into income. In this episode, Tina Beckwith and personal finance expert Jean Chatzky discuss how advisors can help close this critical planning gap, build retirement confidence, and create more valuable client conversations through earlier, income-focused planning. Read the Transcript. 

Hi everyone! Welcome to a new episode of LIMRA and LOMA's Insider Insights podcast. I'm Tina Beckwith. Now, today we're diving into retirement readiness and the challenges that many Americans face as they approach retirement. LIMRA's latest research, the Retirement Income Readiness Report, found that while most retirees are thinking about how they'll generate income and retirement, many still haven't translated that awareness into a formal plan.

Now, the research also highlights growing interest in protected lifetime income solutions and the important role that financial professionals play in helping consumers feel more confident about their financial future. To help us unpack what these findings mean in the real world, we're joined by someone who has spent decades helping consumers navigate life's biggest financial decisions.

Jean Chatzky is a fellow of the Retirement Income Institute, CEO and founder of Her Money, podcast host, and the New York Times bestselling author of The Forever Paycheck: The New Retirement Strategy to Spend More, Worry Less, and Never Run Out of Money. And she's one of the most trusted voices in personal finance.

In this episode, we'll explore what's holding consumers back from retirement planning, why retirement income remains such a challenge, and what financial professionals can do to help clients turn uncertainty into confidence. Jeanne, thank you so much for joining us today.

Thank you for having me.

Well, LIMRA's Retirement Income Readiness Report has told us that pre retirees, 88% of them have thought about retirement income, yet half have really taken steps to plan or learn about them. So what does that tell us about the gap between awareness of the need and opportunity and Americans actually taking action?

It tells me that Americans have some work to do. I mean, clearly they're getting to the point where they're starting to think about this, and that may be a measure of peak 65. It may be a measure of the fact that more people are approaching their 40s and their 50s, and they're starting to think retirement is coming.

I'm doing all this work saving, but I don't know how to complete the puzzle. And as I learned in doing the writing for the new book that you mentioned, it's complicated. It is both a very, very complicated math problem because getting the money out of assets and into the form of income requires some complicated navigating of taxes and Medicare penalties.

But it's also a really complicated emotional problem because after so many years of saving, flipping the switch to spending turns out to be more difficult than many people might have anticipated. So tapping into their advisors and actually getting to the point where they have a plan is, I think, where people need to go.

Yeah, and that's a great point, because apparently about 74% of those retirees actually do want to learn more about protected lifetime income. What type of opportunity does that provide for financial professionals to kind of bring their clients along that journey?

Huge. This is this is the moment I think it it has felt like we have been moving toward this for a good decade, but I think we've finally tipped a bit. I think we've finally gotten to the point where people may not know the word cumulation, but they get that they want an income in retirement, they get that they want some sort of a paycheck in retirement.

They don't know how to do it. And that opens the door for financial professionals to lay out a roadmap for them, to help them figure out what type of income best suits their needs, how much they need in order to complement Social Security. You know, financial professionals should be stepping in from the get go and helping their clients figure out when to take Social Security, because that lays the groundwork for the income that comes next.

Yeah. You make such a good point around using some of this language. Accumulation de accumulation. People know about saving and spending and what those behaviors are. Right? And you know, the report also highlights some misconceptions that consumers have around retirement income. How can financial professionals help them really address some of those misconceptions and better understand what the options are?

I think we have to go back to explaining things from the ground level up. This is not just like consumers needed to understand, to speak the language of 401 K's and IRAs. We need to learn to speak the language of retirement income, right? It took us a long time to come along that 401 K curve to understand what's a target date fund.

Am I better off in this, or am I better off if we don't have the tools and we don't have the vocabulary. And so consumers need to understand what is an annuity. How does that work. What is a bond letter. How is that different which benefits me? What guarantees can I get with one versus another? What kind of returns can I get with one versus another?

How much work is one versus another? And as I get into my 70s and 80s, when perhaps cognitive impairment starts to show up, am I better off with one type of income versus another?

Yeah, you're so right. In the you mentioned the target date funds. I can actually remember the first time I went into my plan and saw that. So we're going back many years, but I didn't know what it meant. And it does become a part of the dialog and understanding. And that's where we need to help consumers come along.

So Gene, one of the strongest findings from the report was that 77% of consumers feel confident in their retirement plan because they work with a financial professional, compared to 47% of consumers feeling confident, and they are not working with a financial professional. So what can advisors do to really make the conversation more approachable and accessible to consumers?

I think it's it's a two part problem here. It's making the conversation more approachable to consumers, but also making consumers aware of the fact that financial planners and financial professionals are there for them. And that's that's marketing. I mean, that's that's that's your department. Yeah, it's it's really it's really about getting out there and telling people, hey, if you haven't had a conversation with a financial professional and your concern about saving for retirement.

Am I going to have enough making my money last in retirement, as we know everybody is? And how to do both of those things? I'm the person that you need to talk to. I'm the one who can help you. And by the way, when it comes to the tools I have, I have all of them. I have a lot of them. I'm not going to necessarily lead you down one road.

I'm going to lead you down the road that is right for you. I'm going to listen to what your goals are, and then I'm going to come up like a doctor would with a prescription to help you achieve your goals. But you need the guidance. This is not something that you should be trying to do necessarily for yourself.

Yeah, and I love that you made that connection. It is a call to action for communication. Right. And, um, you know, when you think about the 76% of those retirees who don't have a retirement income plan, and yet they've probably spent less than five hours a year actually doing work for planning their retirement.

I mean, we all spend more than that on our phones every month, right?

Every day.

Every day. And you know, that too, is I think it's related, is it not?

It is. We have to we definitely have to put in the time. Once you put in the time, it may not take as much time as you think. But I'm always astonished that we'll spend more time buying a car, more time planning a vacation than we'll spend planning this next phase of our life. And what people, once again, they need to understand that a retirement income plan is not a saving for retirement plan.

They are two very, very different things. They

I would argue that a retirement income plan is more important almost than a plan for accumulating for retirement, because we've got so many systemic helpers built in to how we save for retirement these days. We've got auto enrollment into 401 and auto escalation and the target date funds. None of that exists.

On the flip side, the  systemic nudges for cumulation or spending don't exist, which is why many retirees aren't spending. And one of the emotional things or tools that I think advisors should be using, because I've been going out and I've been talking about this with my book, and I am getting people in the audience raising their hands and acknowledging the fact that they can't spend and they're so upset because they've spent so many years saving for this very thing that now they find they're not able to accomplish, except if they have a plan, except if they have some retirement income.

So it's really it, it's a it's a gap in the process.

Yeah. You're so right. People spend 40 or so years saving and there's so many tools there. But the conversation around what happens that day one on really has not taken hold the way it needs to. And you know, what opportunities do you see for advisors to have these meaningful conversations with people who might be getting ready to retire in 5 or 10 years?

It feels right around the corner.

How I think Everybody needs a pre-retirement checkup ten years out. I mean, ten years is a nice window because ten years gives you enough time to be a little fluid. If you're learning that you need more money, you can certainly work a little bit longer. If you're learning that you need to transition into retirement to continue some income so that you can delay Social Security, or that you need a bridge annuity to get you to Social Security.

You know, this is the right time to start thinking of all of these things, and it's the right time to start looking for product, because a lot of products are built with incentives so that they have some growth before you actually get to the point where you turn the income stream on. And so I think ten years out is, is really, you know, some, some financial professional somewhere is going to put a label on a ten year out pre-retirement checkup and good for them.

That's, I think, what they should do.

Yeah, that sounds like the sweet spot to be having that conversation. Now, from the Retirement Income Readiness Report, what would be the one thing that you would leave financial professionals to think about and consider in, uh, in these conversations with clients?

I was blown away by the amount that confidence jumped when people not only had a financial professional in their life, but a written plan writing it down. I mean, sometimes I think we think, oh, who needs, you know, who needs to write it down? As long as you know what you're going to do, as long as you've outlined the steps, you're going to be fine.

No, the written plan turns out to be incredibly meaningful, and I think it's because when we are in the office with our financial professional, some of those things just again, like being in an office with a doctor, some of those things we can't hear in the moment they go over our heads. There's too much information.

Some of the important nuances fly by the wayside. But when we have a written document that we can actually go back and refer to, that gives us the confidence that we did actually hear it, right, that we know what to do next, that we can figure out, oh, this is what's coming in year three. The combo of the financial professional and the written plan is, I think, what's going to take us forward.

Jean, thank you so much for sharing your insights and perspective.

My pleasure. Thanks for having me.

Now, one of the clearest messages from this conversation is that retirement planning isn't just about accumulating assets, it's about helping people create confidence in their future income and giving them a clear understanding of how they'll sustain their lifestyle throughout retirement. Now, as the report shows, consumers are looking for guidance, education and greater clarity around their options And for financial professionals, that creates a significant opportunity to have much more meaningful conversations around retirement income planning, protected lifetime income, and long term financial security.

Now, to learn more about these findings from the Retirement Income Readiness Report, visit LIMRAFinPro.com. Thank you for listening to Insider Insights, and be sure to subscribe and join us next time as we continue exploring the research, trends and ideas shaping the financial services industry. Until next time, I'm Tina Beckwith.

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