New Covisum® White Paper Suggests that the Concept of the Retirement Nest Egg is Dead

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Covisum founder and president challenges financial planning industry to ditch the old adage of the nest egg and adopt a carton approach

Cover of The Extinction of the Nest Egg white paper

Cover of The Extinction of the Nest Egg white paper

Retirement planning is less about helping clients save and manage a single nest egg and more about helping them crack the right egg at the right time.

While historically, a sum of money saved for the future was described as a “nest egg,” the concept doesn’t accurately reflect retirement for a good portion of the U.S. population. For many, there are multiple options for saving for retirement: 401(k)s, 403(b)s, IRAs, fixed annuities, certificates of deposit and more. In addition, many working Americans receive some retirement income from Social Security or pensions.

“Retirement planning is less about helping clients save and manage a single nest egg and more about helping them crack the right egg at the right time,” said Joe Elsasser, CFP®, Founder and President of Covisum, the tech company that provides Social Security Timing®, Tax Clarity®, SmartRisk™, and Income InSight®.

In a new Covisum white paper, “The Extinction of the Nest Egg: How Successful Advisors Are Adopting a Carton Approach,” Elsasser explains how the current tax system, Social Security rules and other factors interact. The white paper reveals how advisors can identify and address the issues created by these interactions and how to deliver smart, sophisticated retirement income strategies that pull from many income streams, not just one.

“Many Americans believe that they have their retirement strategy figured out or that it’s as simple as getting their Social Security check and making 401(k) withdrawals. For some, it may be that simple, but it’s also likely that there are number factors they haven’t considered. For example, are they considering how much of their money is spendable versus how much is needed to pay taxes?” said Elsasser. “Unaware of the complex interactions between retirement income streams, they may not think they need a financial advisor, and they remain unaware of how additional help can deliver better outcomes.”

The latest financial technology can now integrate retirement considerations in a process that is easy for both the advisor and the client to understand. Graphs and charts can visually demonstrate that retirement decisions should not be made in a vacuum and show how the different decisions interact. With the right tools, advisors can even test the strategy against unexpected stress events like a down-market or an early death.

“Developed by thought leaders who understand the intricacies and interrelated nature of retirement considerations, technology can now integrate retirement considerations in a process that is simple for both the financial advisor and the client to understand,” Elsasser said. “Advisors can show how one decision can interact with a seemingly unrelated decision to either cost or save the retiree money, and they can show in dollars how much they can either earn or save clients.”

A good advisor with the right technology can be incredibly valuable to retirees by preventing unnecessary headaches caused by an unforeseen tax jump or a less-than-optimal Social Security claiming decision. Retirees can save thousands of dollars that otherwise would have gone to taxes by working with an advisor who adopts a carton approach to financial planning.

About Covisum
Covisum® is a financial tech company that finds significant gaps in financial understanding and builds software solutions to help advisors and financial institutions grow and improve lives through better retirement decisions. With our proven process, advisors are able to streamline their practices, offer actionable insights and utilize successful marketing tactics. Covisum powers some of the nation’s largest financial planning institutions and serves more than 20,000 financial advisors.

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Lauren Laferla
@covisum
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