If your client is retired with a pension, he or she may not need to worry too much about investing. However, if they received a lump sum from selling a business, for example, they may have to come up with a strategy for living comfortably for the rest of their life off that lump sum. Inflation and uncertainty as to the number of years remaining in their life are the two big complications.
Here are eight tips your clients may want to consider as they plan their retirement and legacies.
Make Their Money Last a Lifetime. Their money has to last at least as long as they do. The Alliance for Aging tells us the average person is born with a set of genes that would allow them to live 85 years and maybe longer based how they take care of themselves. Your clients’ retirement plans must include longevity provisions.
Protect Their Money Against Market Losses. Do not go into the market unless they have two layers of protection and a safety net. Their retirement strategy should protect their money first, generate competitive returns second. They may not have enough time to make up lost money.
Stop Losing Money the Safe Way. Low-paying fixed investments like CDs actually lose money after inflation and taxation. Once again, they may not have enough time to make up lost money.