My, how the conversations have changed. It seems that 10 years ago many of the conversations I had with clients and prospects revolved around accomplishing their retirement dreams: playing plenty of golf, having time with the grandkids, travelling all over the world. The markets were cooperating, clients were still a number of years from seriously considering retirement and they were filled with great expectations of being able to reap the rewards of moving onto the next stage of life.
Now these same individuals are closing in on a retirement date, and those lofty retirement dreams, for many, seem unattainable. Many are now looking to work longer, take fewer trips and hope to just not run out of money. The tenor of the conversation has changed dramatically.
The question is, as professionals, what do we say to our clients who feel like they will never be able to retire in the fashion they once dreamed of?
Clearly, not all of our clients fit this description. Each of us has the “AA” client with several million dollars for whom pursuing their retirement dreams may not be an issue. But even for some of them, thoughts creep in that indicate they have concerns.
I have the privilege of sitting on the Curian Executive Advisory Council. We meet semi-annually to hash out topics that are of interest to the dozen or so top advisors who attend. At a recent meeting, one of those topics revolved around what to tell clients whose retirement plans indicate they will not be able to reach their goals. The topic was hotly debated, and the underlying message was that this was happening in all of our offices, often, and that the discussions were not always happy ones.
So from my perspective, I offer some practice management ideas on how to deal with this difficult issue.
First, the focus of the retirement discussion has to be broader than just the money. Yes, the engine that fuels the retirement plan is cash flow, and investment returns are needed generally in order to accomplish this. We have those fortunate clients who need little income from their nest egg, but the majority of my clients still need to complement their fixed income sources. However, we have no control over returns, particularly the timing of those returns. Those who retired in the ‘80s and early ‘90s had a different experience from those who retired in the past 10 years. Timing is everything. We have no control over this in the planning process.
Instead, focus on what you and your clients can control. I spend a significant amount of time with my clients in their reviews talking about all of the areas they can control. Financially, we make sure they have completed all estate planning and beneficiary forms. We help them visualize success by working with them on bucket lists. Physically, we have created forums to help them get better informed as to how to stay healthy. Emotionally, we have brought resources to them to help them understand the journey they are on and to try to give them tools to be the best they can be.
One of the “deliverables” we provide our clients is a Financial Organizer System. Studies indicate that our clients, no matter how much money they have, feel disorganized and out of control when it comes to knowing what they own and where it is. The feedback we receive from our clients is that the organizer system is one of the best things we do for them. It helps them feel much more in control. Create your own or buy one already built. It’s a big piece of what we can do to make our clients feel better about their journey.
Second, we have clients who just have not accumulated enough to retire. What do you tell them?