section 1 - The American College Online Learning Center

c. Supplemental Security Income (SSI) — those with limited income and resourcesaged 65 and older may be eligible for additional supplemental security income.Only those with the lowest income qualify — but for those in need, the benefit issignificant, as singles can receive about $700 a month and couples approximately$1,000.d. Charitable gift annuities (CRTs) and similar type charitable gifts — can createa current or future income stream for a client or family member. The paymentoptions are quite flexible and with a CRT there is even the opportunity tocustomize the underlying investment portfolio supporting the income stream. Wewill discuss these later in the course.e. Ask if there are any other income sources that will be available in retirement.LO 2-2-2: Identify assets that can be used to generate retirement income1. Inventory assetsa. First, help the client create a balance sheet, and then get a complete list of assetsfrom the client’s balance sheet.b. Determine whether the asset is actually available to meet retirement incomeneeds.c. Valuation(1) Most personal property such as home furnishings, autos, and evencollectibles are generally not used to meet retirement income needs.(2) Home equity is a bit trickier. It can be used to create income, but it mustbe used with proper planning and knowlegde.(3) Most financial assets will be available to meet retirement income needs;however, some may be earmarked to meet other financial objectives suchas funding college education expenses for a child or grandchild.(1) Current market value is generally easy for the client and planner to assess.(2) The market value at retirement is more difficult for the client and theplanner to assess.(a) How much more will the client and his or her employer contribute?(b) What is the return assumption used to value the assets?(a) Simple retirement calculators will apply a statedrate-of-return assumption on all assets.(b) More complex tools allow different assumptions for differentassets, as not all assets will appreciate in value at the samerate.d. Does the asset have any special provisions for converting the asset into income?(1) Example: A qualified defined-contribution plan allows distributions as alump sum or an annuity. Annuities may have favorable institutional pricingthrough the plan.e. Account for assets that the client may have in the future, such as inheritances.2. Retirement plan review:(1) For many, these amounts are too speculative to incorporate into the plan.(2) For a few, the situation may be so clear that considering the asset as partof the retirement plan is appropriate.2.13