Marilyn Littlejohn, CFP, branch manager, Raymond James & Associates Inc., St. Petersburg, Fla.
1. Which retirement issue has hit you or your clients out of left field, and how did you resolve it?Littlejohn: At retirement, it's common that clients want to downsize their homes to save on costs and reduce maintenance. However, with the housing downturn, they either are reluctant to sell or are holding on to a former home after they have moved. Another factor here is the cap on property tax increases. Many retirees find that if they move, their property taxes are going to be much higher, even if the property value is lower in a new home.
2. Which prospecting methods have been most successful for you in attracting retirement-planning clients?Networking with executives retiring from the same local company is effective. I also networked with an outplacement agency that is hired by large companies to help executives that have been "downsized".
3. Do you face any frequently occurring retirement-planning mistakes with prospects?I frequently find the mindset that people have an odd plan for retirement income. Their intention is to sell a large sum of their growth investments, sweep the proceeds into a money market, live off that money until the cash is all spent, and then repeat the process. I'm surprised at how many people do not understand or want bonds. Most people are not aware of using a systematic withdrawal plan from growth and income mutual funds.
4. What challenges do you face when modeling clients' retirement incomes and cash flows, and how do you resolve these challenges? Clients have a hard time developing a budget and staying with a budget. Many clients see a lump sum amount becoming liquid at retirement and go on a spending spree. We use retirement cash flow spreadsheets to illustrate the need to have the lump sums to generate current income. You don't want to kill the goose to get the golden egg.
5. What mix of products and solutions do you use most often and why? I have had a lot of success with tried-and-true staples including municipal bonds, high dividend stocks, preferred stocks, annuities, and mutual funds. Recently, our asset-management department developed a retirement income strategy that uses mutual funds or exchange traded funds to deliver consistent income for early, mid, and senior retirement models. Using these managed accounts allows me to focus on all the many other issues clients have, like grandchildren education funding, long-term care needs, estate, and tax planning.