Its Time To Get Real
Getting aging baby boomer clients to get real about setting up a sound retirement plan is not as easy as it may sound.
For instance, one two-income boomer couple had trouble building up retirement savings. They were clients of Dianne Koeppler, a financial planner and partner at Navigator Planning Group, Green Bay, Wis.
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Since the two could not figure out the source of the problem, Koeppler asked them to keep track of their income and expenditures for several months. When they returned, the husband was amazed. “He learned he had spent $700 at a pizza parlor in just one month,” Koeppler recalls. “He was not even aware they had been spending that much on things like that.”
Meanwhile, the couples savings amounted to only a small emergency fund, she says.
Turns out, this is not an uncommon occurrence in advisor offices these days, based on comments made in interviews with National Underwriter.
Many boomers are just in denial, says Stanley J. Grabowski, sales associate at Dedecker-Saxe Associates, a brokerage owned by M&T Bank in Buffalo, N.Y. “They deny that they need to plan or they repress the fact that they may one day need long term care or may run out of money or may need to go back to work after entering retirement.”
But advisors can take steps to help many such clients start to get serious about their planning, say experts. At least, they can point the way.
For instance, when an advisor has established rapport and trust with boomer clients, the advisor can point out how the client is not yet dealing with the issues realistically, says Russ Kyncl, a financial representative and branch manager with Multi-Financial Securities Corp. in Lakewood, Colo.
The advisor might, for instance, observe that “there is a pattern going on in your life that is making this [financial problem] happen.”
This does not always go over well, he allows, and “some clients might fire you.” But if the relationship of trust is there, many will keep listening and some will accept, he contends, “particularly if you find some hope to give them, or show them they can turn things around if they start dealing with reality.”
People who attend seminars do have a lot more awareness today about LTC and retirement issues compared to 10 years ago, observes Grabowski. But boomers do not always link that awareness to their own lives and “some just dont know how to retire,” he says.
Many times, it takes some kind of personal experience to spur them to take actionseeing a parent or close friend struggle, for instance.
Koeppler believes the advisors role is to help boomers realize that the money will not be as “ever-flowing” as it seems to be when one is employed. Some people have no idea that the money flow will come to an endunless they take control, she says.
“I urge my clients not just to wait and put it on the government or to hang back wondering, what can I do,” Koeppler continues. They can make changes now that will enable them to have a good retirement later, she maintains. But they do have to take some steps.
For example, one boomer arrived at her office with $60,000 in credit card debt and seemed mystified about how to erase that. Koeppler helped the family go on an austerity budget for one year, and they did wipe out the debt. Now, this family is building up retirement savings.
Kyncl has arrived at the same conclusion: “My message to my clients is, you need to be accountable to yourself.”