Having the right amount of cash at hand became a basic human need long before it ever became income planning, according to a number of financial planners who were interviewed on the subject. But now that there is a name for this process, these same financial advisors are saying that this is a huge and necessary discipline that will become a larger than ever part of the entire financial planning process from this point on.



?Clients do not use all of the current slang or buzz words, but everyone seems to be concerned about the same thing, which is where their next paycheck is going to come from,? says Rene Lecape, Member of the San Diego Hispanic Chamber of Commerce and Marketing Manager for eQuote Life Insurance.?It is one of the absolute most basic things that people are planning for, and most have been doing some form if income planning for a good long time.?

There are a lot of things out there that eventually turn into buzzwords, describing processes that people have been doing for forever. Right now, advisors in many areas are being told to focus on being an income planning specialist. If advisors are going to begin to offer income planning for their clients, then they can actually take things one step further and offer a full suite of financial planning assistance. Rene Lecape says, ?Income planning is huge right now.?

Why has income planning become so popular all of a sudden? People tend to be living longer in this day and age, and they are realizing that they may lose out on social security, meaning that they need to explore other options. Low interest rates in the current market are allowing more people to become aware of the income streams that they have and the fact that they may not be enough for support in the future.

?You have to begin the conversation,? Rene Lecape says, referring to the idea that financial advisors and their clients should come together and discuss these topics while there is still time to do something about them. Clients should be educated, even if they do not completely understand all of the concepts surrounding income and financial planning, it is still important for them to have some understanding.?

Income planning should serve as a multi faceted concept, also including wellness planning and planning for long term care at the same time. There is a serious need for income planning, as most clients are completely unaware of what their income will be like at the point of retirement. Clients are not usually able to handle their own income planning, and will require help in a number of areas including how much of their assets can be withdrawn at any point in time.

According to Rene Lecape, ?Clients also require the assurance that they are going to have the sufficient income they need through their financial plan, even if there are uncertainties in the mix.?

There is one question that continues to surface: ?How can a portfolio be turned into a monthly stream of income?? The size of the portfolio can determine the conversation a client needs to have with his or her financial planner. Naturally, the larger the portfolio, the more longevity and withdrawal rates need to be considered. The smaller the portfolio, the more annuitization needs to be considered.

This is a very important topic for a variety of clients in an environment where the interest rates are relatively low. Because income sources are going to be less assured in our futures, financial planning is even more important than ever.