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have an annuity question?
have an annuity question?

3 Reasons Why It Pays To Work With A Financial Advisor

William P. Bengen knows a thing or two about financial planning. Not only is he good with numbers, he graduated from MIT, worked as a financial planner, and co-authored a book called, Topics in Advanced Model Rocketry.” But that book wasn’t what ultimately rocketed Bengen to fame. He is most known for a paper published in 1994 in the Journal of Financial Planning that became the foundation for what is arguably the industry’s most referenced rule of thumb: the 4 percent rule. Bengen developed this rule to answer the question, how much can you spend in retirement without running out of money?

Do you know the answer to this question? Do you know the answer to this question? Do you know how your portfolio will generate an income? Bengen himself is also retired and living off his savings. He is the first to acknowledge that retirement planning is much more complicated than it used to be, in fact, he hired not ONE but TWO financial advisors to manage his assets. Here’s why.


Perhaps the smartest thing you can do for your financial future is to talk with an advisor about your plans for retirement. The 2017 findings from the Employee Benefit Research Institute report that more and more Americans are feeling financially stressed and unsure about their ability to retire. More than 40 percent younger workers under the age of 40 don’t have access to employer-sponsored retirement plans and those that do are confused and have limited knowledge about how these plans work. The antidote might very well be as simple as setting up a meeting to talk with an advisor. New research from Northwestern Mutual’s Planning & Progress Study finds that Americans who receive guidance from financial advisors feel significantly more prepared and less stressed about retirement. An advisor will bring up concerns and solutions that you might not think about, however, the decisions about what you choose or don’t choose are ultimately up to you.


So, if working with an advisor can help you feel better, can he or she also help you do better, too? They can! David Blanchett and Paul Kaplan at Morningstar created a simulation study about the value of good decision making focused on how retirees can achieve a higher income.  All the details can be found in their white paper, “Alpha, Beta, and Now… Gamma,” but the gist of what they found is that making better decisions can potentially improve your outcome by as much as 22.6 percent above the naïve investor trying to figure it out on their own. Part of the reason for this has to do with the complications that come up when you consider issues such as taxes, fees, and optimum allocation.


Going back to Bengen’s 4 percent rule, perhaps the biggest reason of all to get good financial advice is so that you can have the freedom to think about other things. While the spending rule suggests that funding a retirement is a simple as withdrawing 4 percent annually and adjusting for inflation, experts now suggest that the rule no longer works. Given today’s increased longevity and our low-interest rate environment, a safer withdrawal rate might be closer to 2.8 percent according to one report, which means you need to start out with a much bigger pile of money. This is not encouraging news. On the other hand, instead of relying on automatic withdrawals that drain your account with no safety net or stop loss, you can choose to fund your retirement using a tool that was designed to give retirees a consistent stream of income regardless of interest rates. When you no longer have to constantly monitor your money, you’re free to do more enjoyable things. Mr. Bengen spends his days writing, playing guitar, and visiting his grandson. His final advice on the subject is to go to a qualified adviser: “You are planning for a long period of time. If make an error early in the process, you may not recover.” If you haven’t taken steps yet to secure your retirement income, talk to one of our advisors about your questions. We’re happy to help you make smarter decisions about the money you want to use for your income during retirement. Build Wealth Like A Millionaire Without Saving In A 401(K)
  • Georgina Winter
    12:11 AM, 22 November 2017

    I like that you talked about how people who receive financial advisors feel more prepared and less stressed about thinking of their retirement which is important is getting peace of mind for your future. My father worries about how retirement can affect his finances. He’d like to make sure that he will be able to manage his finances as early as now to secure his future. For me, hiring a financial planner will help a lot my father, so I will make sure to share your blog with him.

  • Latoya Anderson
    8:54 PM, 9 February 2018

    I like that you talked about how wise it is to talk to a financial advisor about your plans for retirement to make sure that you will be given the knowledge about how prepared you are for retirement. My parents are looking to retire 3 years from now. They are uncertain about their ability to retire because they don’t have effective retirement plans that can help them in the future. It will make sense for them to hire a financial advisor that can evaluate their ability and help them with retirement planning. Thanks for sharing your tips!

  • Annuity Gator
    10:43 AM, 12 April 2018

    Hi Latoya – Thank you for your message. Yes, because all situations and financial goals are different, there really is not any one-size-fits-all solution, so talking with an advisor is wise. We would be happy to answer any additional questions or concerns that your parents may have about annuities, which could help them to narrow down which annuity would be best for them. They can contact us directly, toll-free, at (888) 240-2468 or by going online to our secure contact form at: . Best! The Annuity Gator

  • Annuity Gator
    11:02 AM, 12 April 2018

    Hi Georgina – Thank you for your comment. It is true that having an income you can count on can make retirement much less stressful – and an annuity can help to make that happen. If you and your father would like any additional details on which type of annuity would work best in his specific situation, we would be happy to walk through some options so that you / he are more familiar with the benefits and other attributes. You can contact us directly, toll-free, at (888) 440-2468 or online via: . Best! The Annuity Gator

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