Chuck Robertson is the type of advisor every retiree wants. He watches every penny his clients spend, and that includes helping his retired widow clients–who make up 40% of his business–negotiate the best car deals. “They’re not clients, they’re friends,” he says. “If I can’t have this type of relationship with them, I don’t want them as clients.”
Robertson manages $17 million for 300 clients, and 70% of his firm’s annual revenue comes from retirement planning, so it’s crucial for him to know clients’ entire financial picture. “I advise my clients, at no additional charge, to send me their asset allocation models in their 401(k)s,” he says.
Robertson, president of The Robertson Financial Group in Tampa, is no newcomer to serving retirees. He’s been doing it for 23 years, but he’s the first to admit that today’s retirees, particularly baby boomers, face a more challenging retirement than previous generations. One of the most crucial aspects, he warns, is that taxes will be higher over the next 15 years. Why? There are 76 million baby boomers–which make up between 32% and 35% of the entire U.S. population–and within the next 15 years they will either be pre-retirees or retired. While the number of retirees will skyrocket, the number of workers paying into Social Security will plummet, plus Medicare and Medicaid payouts will reach an all-time high. Increasing taxes, he says, will be the most efficient way to make up for shortfalls.
In Florida, an astounding 25% of the state’s budget is devoted to Medicare and Medicaid payments, Robertson says. To rein in the cost of those payments, Florida has enacted “two prototype programs based on HMO-type standards to do the qualifications for Medicaid planning and Medicaid cases,” he says. “The state is revamping the qualifications of how [retirees] can make gifts [to their heirs], how far out it can be [from retirement], to qualify people for Medicaid if they went into long-term care.”
Factoring in a retiree’s medical expenses “goes directly into our [planners'] thinking,” he adds. People are also living longer, he notes. Fifteen years ago, the bulk of Robertson’s clients were 70- to 75-years-old. Today, he has nine clients over the age of 84 and four older than 90.