Advisor checklist: 5 ways to increase retirement income

Despite the focus on saving for retirement, for many retirees, monthly income will still fall short.
A 2012 report from Fidelity highlighted the importance of getting clients started early when it comes to retirement planning:
Fidelity Investments’ new Retirement Savings Assessment report found that, on average, American households can expect their monthly income to decline about 28% a month in retirement and nearly four-in-10 (38%) of retiree households say they don’t have enough income to cover their monthly expenses…
“While there is evidence that Americans are saving more for retirement, our analysis finds that they need to take additional steps to prepare for the future and take better control of their personal economy,” said Kathleen Murphy, president of Fidelity’s personal investing group. "The study underscores the importance of early engagement in the retirement planning process.”
Based on Fidelity’s analysis, here are five simple ways to help your retired and near-retirement clients avoid a shortfall:
1. Suggest an asset reallocation
Based on their current age and planned retirement date, a significant number of near-retirees are not taking on enough investment risk. Since 2008 many retirees have too little exposure to stocks. For investors who have five or more working and saving years to go, they can benefit from the stock market’s historically higher returns.
2. Encourage clients to increase their savings
Americans appear to be saving more on average than they did five years ago, but most are still not taking full advantage of their tax-deferred workplace and individual retirement accounts. For clients with a longer run up to retirement, this can be the simplest and most effective fix of all.
3. Ask about rethinking their retirement date
The average planned retirement age is 65, but delaying retirement by a couple of years or continuing to work part-time can help preserve assets and increase savings. This tactic is especially important for boomers at or near retirement age who are facing a significant drop in post-retirement income.
4. Have clients consider annuities
Fewer than one-fifth of retirees have an annuity with a guaranteed lifetime income stream to cover their essential expenses. This can be an effective way to ensure that a retiree’s savings last through retirement – especially if the client winds up living into their mid-80s and beyond.
5. For some clients, tap into home equity

Nearly a third of all homeowners have already paid off their mortgage. Reverse mortgages and other techniques can let them tap into their home equity to generate additional income during retirement.