Guaranteed Income and Retirement Happiness: What Advisors Should Know
In This Episode
About the Episode:
Many of your clients are sitting on enough wealth to live exactly the retirement they saved for. The fear of running out shapes how they spend long before they do. In this episode, host Dave Alison, CFP®, EA, BPC, President of Wealth Management and Founding Partner at Prosperity Capital Advisors, sits down with economist and retirement income specialist, Tom Hegna, to dig into the research behind guaranteed lifetime income and why that foundation tends to change how clients spend, plan, and experience retirement.
Whether you are newer to incorporating annuities into client conversations or looking to sharpen how you present them, this episode covers the research and the framing in one place.
Key Topics Discussed:
- The “Just in Case” Retirement: Why clients with significant assets often hold back in retirement, and what that pattern tends to cost them.
- Research on Happiness and Guaranteed Income: What major publications and academic studies found when they looked at retirees with guaranteed monthly paychecks.
- Replacing Bonds with Income Annuities: How leading researchers frame the case for shifting fixed income allocations, and what the math behind that looks like.
- The Death Valley Analogy: Tom’s go-to story for reluctant clients, and why it reframes the conversation around a guaranteed income floor.
- When to Start Laddering: Tom’s view on the right time to begin building guaranteed income, with a real example of the math at different ages.
- The Bucket Plan® and Income Placement: How Dave structures guaranteed income across time horizons and why liquidity still matters in every plan.
- Conviction in the Client Conversation: Why the advisors who own what they recommend tend to have a different kind of conversation about it.
Resources:
- Website referenced: Tom Hegna On Demand
- Books referenced: Don’t Worry, Retire Happy and Paychecks and Playchecks by Tom Hegna
Statistics:
- Retirees with annuitized income spend twice as much as those with non-annuitized savings
- Fixed indexed annuities have outperformed bonds on an annualized basis for the past 90 years
- The efficient retirement portfolio frontier shifts from stocks and bonds to stocks and annuities
- Annuities can increase happiness in retirement
- The secret to a happier retirement is friends, neighbors, and a fixed annuity.”
- Ernst & Young: The optimal retirement portfolio is approximately 30% income annuities, 30% permanent life insurance, and 40% investments.
- BlackRock: Retirees should hold 20–40% of their retirement portfolio in annuities.
- Goldman Sachs: Annuities can produce better returns than a stock or bond portfolio for lifetime income purposes.
About the Host:
Dave Alison, CFP®, EA, BPC is an accomplished financial planner and business leader committed to helping advisors expand their reach and improve the quality of their service to clients. He is the President and Founding Partner of Prosperity Capital Advisors, an acclaimed planning-first RIA. Dave leverages his expertise in all things financial planning, particularly taxes and solutions for high-net-worth clients, to educate financial professionals on best practices and ways to raise the bar in their own practices.
About the Guest:
Tom Hegna is an economist, author, and retirement specialist who has been featured on CNN, Forbes, The New York Times, Fox Business, Wall Street Journal, Huffington Post, PBS, and Yahoo Finance.
A retired Lieutenant Colonel with over 30 years of experience in the financial services industry, Tom has delivered more than 5,000 seminars and workshops to financial professionals across the country. He is the author of several best-selling books including “Don’t Worry, Retire Happy!” and “Paychecks and Playchecks.”
