Five Questions for the Retirement Advisor

The biggest mistake is not paying attention to what’s happening with their money. I tell prospective clients that nobody cares about their money more than they do, and so it’s that much more important for them to read their statements and understand what’s happening with their money. They don’t pay attention, so their accounts are ebbing and flowing and they have no idea why — that leads to a number of mistakes, not just one in particular.

4. What challenges do you face when modeling clients’ retirement incomes and cash flows, and how do you resolve them?

One challenge is debt. If folks are in debt, we have to make sure they address it correctly, because the debt creates challenges as to how creative an advisor can be. We have models that address accelerating their debt payoff, while still keeping liquidity and income needs in consideration.

The other concern in modeling is inflation. One thing we do to take the pressure off the investments’ return is to increase the savings goal for our clients by 3 percent every year. That helps to offset a bit of the impact of the inflation.

5. What mix of products and solutions do you use most often and why?

For investments, we use individual bonds and exchange traded funds (ETFs) more than anything else. Those both provide low cost and tax efficiency. We try to create efficiencies in those two areas to take pressure off the assets, so clients have more money working for them. Also, we work a lot with small business owners and use retirement plans: defined benefit and defined contribution. Those are logical tax-avoidance strategies.