Whether you’re a stockbroker, fee-based financial planner or insurance agent, are you taking the right approach and doing enough to help your clients position themselves for the kind of retirement they dream about?

During my nearly 35 years in the financial services industry, I’ve found clients that are planning to retire within the next several years require a far more hands-on approach to make sure they are on the right course to a successful retirement and to help them stay on the right track than those clients who have many years before retirement.

While it may be typical to have annual reviews with our existing clientele throughout the years, during the penultimate time period which is generally three to five years prior to retirement, it becomes even more essential. Retirement planners should spend a lot more time with these pre-retirees to make certain the following items are addressed:

  • Proper budgets are in place;
  • A debt reduction plan is initiated if necessary;
  • Investment assets are properly allocated to mirror clients’ investment objectives and risk tolerance levels;
  • Maximum contributions to current retirement plans are being made if possible; and
  • A future retirement income plan is being discussed, preferably one that provides guaranteed income for life that can’t be outlived, which may eliminate longevity risk associated with longer life expectancies.

Pre-retirees may also have many additional factors to consider, such as where they would prefer to live during their golden years. I’ve found many retirees prefer to live closer to their families in order to spend quality time with their children and grandchildren that may have been limited during their working years.

Other considerations include health insurance coverage once they stop working. Most employer plans no longer provide this as a retirement benefit as they did in years past. Of course Medicare is the primary option for most people beginning at age 65, but the coverages may not be as good as they had from their previous employer’s group plan. This is why many retirees choose to purchase Medicare supplement policies to fill in the gaps of what Medicare doesn’t cover.

Another very important discussion we need to have with our clients is the possibility of needing some form of long-term care during their retirement years. We all know the expense associated with care facilities, but home health care costs have skyrocketed as well. The fact that people continue to live longer due to many factors including medical breakthroughs increases the odds that more of our retiree clients will require this type of care during their lifetime. We need to include solutions to this very real problem in retirement planning scenarios.

Communicating more frequently with clients during those final years before they retire is imperative. We have a moral and ethical obligation to do everything we possibly can to help them achieve their retirement goals and dreams.  

See also:

Beyond a traditional retirement

How Americans blow $1.7 trillion in retirement savings

Social Security, or savings, or a little of both

 

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