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4 Easy Steps for Investors on Retirement Planning: Russell’s Tim Noonan

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Advisors: What chore do you think your clients would rather do next weekend? Clean their bathroom or do some retirement planning?

Yes, it’s true–studies show that a third of pre-retirees would rather spending time cleaning their bathroom than go through the complexities of planning their retirement, according to Tim Noonan, managing director of Capital Markets Insights at Russell Investments.

Worse, almost one-third of adults in their 50s have never even created a retirement plan, even though nearly two-thirds of baby boomers are afraid of running out of money during retirement.

Tim Noonan, Capital Markets Insights, Russell InvestmentsNoonan (right), who delivered the closing keynote address earlier this month at AdvisorOne’s Retirement Income Symposium in Boston, spoke of how a lack of engagement in retirement planning is leading people to the financial insecurity they dread most, namely, not being prepared for a comfortable retirement.

The good news is that Noonan and his Capital Markets Insights colleague Sophie Gilbert say there are four easy steps investors can take to become more engaged in retirement planning. Read on to learn how you can help clients assume ownership of their retirement and become engaged investors.

Read Noonan’s 3 Ways to Combat Client Disengagement at AdvisorOne.

Step One: Participate.

Help your clients engage and picture themselves in the future by exploring what their future self will want and need, Russell Investments’ Tim Noonan suggests.  By working together to envision clients’ post-retirement lifestyle, they may start seeing the need to make sacrifices today.

“Trying to plan for a future self 10, 20, 30 years out can feel a lot like science fiction to many,” writes Noonan’s Capital Markets Insights colleague Sophie Gilbert in a blog post, “Engaging the head-in-the-sand investor. “In the same way that we as individuals have changed substantially over the last three decades, we’ll change again in the decades ahead. Little wonder then that saving for retirement can feel to some like a choice between spending money today or giving it to a stranger.”

Step Two: Coordinate.

Show your client how their current level of wealth lines up with the cost of the life their future-self desires, then show them if they are on the right track and what adjustments might need to be made, Noonan advises.

“Being engaged in retirement planning is necessary,” Gilbert writes. “Research has shown that those who don’t plan are likely to wind up with less wealth than those who do. It may well be statistics like that one that have 61% of baby boomers saying they’re more afraid of running out of money than they are of dying.”

Step Three: Anticipate.

By planning, Noonan says, you can help your clients insulate themselves from unforeseen events such as market volatility, tax rate changes, health care policy updates and changes to your life expectancy.

“Plus, the world is changing so quickly, it’s hard to predict what life will be like decades from now. Heck, a decade ago neither the iPhone, iPad nor Facebook even existed yet,” Gilbert writes. “Consider how much those three products alone have changed how people communicate, interact and access information in such a short time.”

Step Four: Recalibrate.

“Once a retirement plan is in place, the final step is for an advisor to ensure that there is on-going engagement in a disciplined manner. Make sure that disciplined engagement in retirement planning becomes a way of life for your client,” Noonan says.

To help advisors develop an ongoing engagement plan with clients, Gilbert links to this “Russell Adaptive Investing” web page.

Read Noonan’s 3 Ways to Combat Client Disengagement at AdvisorOne.


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