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How-To Guides

Build a Retirement Income Strategy

Retirement planning can be a complex and emotional topic for investors. Use these steps to help guide your clients as they move toward retirement.

Step
1

Review your client list and retirement plans

How to do it:
  • Identify those clients and retirement plan participants who are near or in retirement.
  • Schedule meetings with these clients and plan participants to discuss their retirement plans.
Step
2

Prepare for your meeting

How to do it:
  • Create a retirement income value proposition that will help your clients understand how you will work with them to create a plan to pursue their goals.
  • Use the retirement income 4-step process worksheet to write down any points you’d like to bring up during the meeting. Here are a few quick tips that you should consider:
    • Keep the meeting under an hour so that your clients aren’t overwhelmed with information. Make sure you leave plenty of time for them to provide input and to ask questions during your conversations.
    • Keep the focus on your clients — their retirement objectives, goals and needs. Make sure they understand that your primary goal is their long-term success.
    • Be prepared to schedule at least one follow-up meeting. Retirement planning is a complex and emotional topic for most investors. Take notes during your meeting and keep a copy of the four-step process worksheet you used in your client meeting in their file to help you prepare for your next meeting. For your second meeting you may also want to use the client summary worksheet to create a high-level view of your client’s retirement goals and overall financial situations.
Step
3

Meet with your clients

How to do it:

Taking the time to discuss your clients’ retirement needs, goals and lifestyle expectations can go a long way to build trust and confidence in your practice.

  • Ask them to explain their vision of retirement. Your clients have been thinking about and preparing for retirement for the majority of their adult lives. By listening to them articulate their plans and visions, you’ll have a better understanding of their needs, goals and concerns.
  • Share the five retirement realities that investors face and explain how a well-planned investment strategy can help them navigate these challenges.
  • Explain your approach and encourage them to ask questions. Make sure they understand how you will work with them to create a plan to pursue their goals. Give them your retirement income value proposition to take with them so that they have something to refer to in the future.
  • Discuss their priorities: Use the prioritization worksheet to gather information about what is important to them in retirement.
  • Get your clients involved. Work with your clients to complete the asset inventory worksheet and monthly budget worksheet. Explain that this information will help you construct a comprehensive retirement income plan designed to meet their unique goals and needs.
Step
4

Review and select investments for your clients’ portfolios

Building sustainable retirement income portfolios requires a dynamic approach that strikes the right balance among income, capital appreciation and volatility. Investments you should consider are:

  • Income-focused equity funds: These funds are designed to provide a regular source of income that can help you manage for both longevity and market risk.
  • Fixed-income funds: Bond funds can add a measure of stability and provide diverse sources of income to a retirement income portfolio. For those retirees who want to reduce their tax burdens, tax-exempt bond funds also can be a source of tax-exempt income.
  • American Funds Portfolio SeriesSM: Two of the eight American Funds Portfolio Series — American Funds Income PortfolioSM and American Funds Tax-Advantaged Income Portfolio℠ — were designed for investors seeking income.
  • American Funds Insurance Series®: Variable annuities can play a key role in retirement and income-planning. The American Funds Insurance Series funds are available through variable annuity products issued by some of the nation’s leading insurance providers. 

Resources to use:

Retirement Income Our offering of income-focused funds.
Building a Sustainable Retirement Income Plan (Single Sheet): Building a Sustainable Retirement Income Plan | Quarterly Statistical Update — Help clients understand the value of equities in their retirement income portfolios.


This material is intended for use by financial professionals or in conjunction with the advice of a financial professional.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.