March 4, 2024

rather than focusing on Anxiety about retirement prospectsIncome Lab wants to help financial advisors determine how confident their clients are about moving into the next chapter.

this Denver-based retirement income management software provider announced Wednesday the launch of its “retirement stress test” tool as part of the Income Lab software suite.

Designed for advisors, the tool shows how retirees have successfully navigated historical periods of high inflation or market volatility, often by making relatively small and temporary adjustments to spending.

The tool’s capabilities include running real-world historical scenarios of client plans through the Great Depression, the post-war period, stagflation of the 1970s, the dot-com bubble, and the global financial crisis of 2007-08 as a basis for comparison.

“In the past, retirement stress tests have focused primarily on how things can get worse when a portfolio is hit, causing significant anxiety in clients. This new approach to realistic stress testing works by showing how adjustments, often small and temporary, Giving retirees the confidence to build the confidence to get through tough times without major changes to their lifestyles,” said Income Labs CEO Johnny Poulsen in a statement.

The Income Lab chief said the tool is unique in that it focuses on retiree behavior, such as spending adjustments, rather than portfolio failures.

“This gives clients more confidence in understanding how their plan will handle the worst times in history and understands that retirement is not a pass/fail,” said Justin Fitzpatrick, Income Lab’s CIO. “It helps advisors change the conversation from success to and failure to move into can-do conversations about adjustments.”

According to Revenue Labs, consultants who participated in the beta testing of the tool have already seen its benefits. Eric Sajdak, a partner at Safeguard Wealth Management in Green Bay, Wisconsin, said his firm used it directly in client meetings during difficult markets in late 2022 and 2023.

“(We) saw immediate relief and a sense of relief from clients when they realized their retirement savings could have stayed strong in worse circumstances than what we’re seeing now, such as the Great Depression or the stagflation era in the 1970s. Confidence,” Sajdak said. “We like this feature, which allows you to show guardrails relative to your portfolio over time.”

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