WASHINGTON — Jafor Iqbal wonders if advisers are from Mars and retirees are from Venus.

It's a vast gap between these two groups, especially when it comes to what each thinks are the risks in retirement, Iqbal, Limra International Inc.'s associate management director of retirement research, said at the group's retirement industry conference last week.

When asked in a survey to rank retirement risks in order of importance, Iqbal said retirees named health care as their top priority, followed by inflation, volatility and, lastly, longevity (how long their money will last). Advisers rank longevity as their top priority on behalf of clients, followed by volatility, health care and inflation.

What do these differences mean for the more than 40 million retired Americans and their advisers?

For one, it means there is a significant lack of communication and understanding about what clients want and how advisers can help. This gap may lead preretirees and retirees to make poor decisions regarding their futures.

Here's an example: Iqbal said only one in six retirees is able to work in retirement, yet 58% plan to do so. "Advisers need to warn their clients that they can't depend on working in retirement, because their age, health and skill set may prevent them from doing so."

According to the Limra study, most advisers do not always counsel clients about some critical risks that could affect their financial security in retirement. The report surveyed retirees age 55 to 80 with $200,000 of investible assets who have been retired for one to 10 years.

Marie Rice, a corporate vice president and director of Limra Retirement Research, said in an interview at the conference that although most advisers are careful about managing their clients' assets in retirement, they are not addressing some key issues and may be putting clients' long-term financial well being in danger.

"Basic retirement planning should include things like: when a client should retire; planning expenses and income in retirement; ordering assets from which withdrawals should be made; and planning any minimum distributions," Rice said.

Yet, the research revealed that fewer than four in 10 retirees have some sort of plan that lowered the risk that their money would run out during retirement, and nearly 25% had more than $100,000 of debt, according to Limra.

Respondents said most advisers are not actually helping with the details of retirement income. For retirees using advisers, 45% said their adviser did not talk to them about minimizing exposure to retirement risk, 42% said their adviser did not talk about which assets should be drawn for income, 41% said their adviser did not talk about minimizing the amount of taxes paid in retirement, 29% said they did not talk about determining which assets should be used first, 27% did not talk about planning for expenses and income in retirement and 13% did not advise on when to retire.

But a separate online study of 922 advisers that Limra conducted in September and October found that 90% of advisers said that they are actively involved in retirement planning; 77% said they are managing assets; 73% said that they do expense planning; 66% said they advise when to claim Social Security and 62% advise when to claim pension plans.

Why the disconnect?

For one, Rice said, when clients look at their statements they see a large lump of money. They are not dividing the big pot to see how much monthly income they will actually have in retirement. "Logic doesn't always work with retirees," she said. "Emotions get involved. Retirees and preretirees need to be shown how much monthly income they will have, not large buckets of money."

To help advisers help their clients, Limra identified five questions preretirees and retirees should ask advisers when developing a retirement plan: When do you want to retire? How do you expect to plan for your expenses and income? Which funds does it make sense to draw from first? Do you know that annuities have minimum distributions you need to perform, and that if you don't perform them there are penalties? What are the retirement risks you worry about, and which ones should you be worrying about?

By answering these questions, Rice said, retirees and advisers should be inspired "to develop a plan that will enable the retirees to live comfortably for the rest of their lives."

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