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Retirement Planning > Retirement Investing > Income Investing

Women and Planning for What Comes Next

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What You Need to Know

  • Step 1: Frame.
  • Step 2: Have a vision.
  • Step 3: Design the portfolio.

Certainly, many women are preparing well for retirement. Others face a profound disconnect between concern and action.

One obstacle is that, for many women, traditional notions of retirement are, at best, foreign.

Women who own their businesses or who work as highly compensated professionals seldom seem to envision shifting to a life of margaritas on the beach, endless golf, or travel.

Instead, they often see themselves working later in life, even if only part time.

For these women, the idea of financial independence makes more sense than the idea of retirement, because independence translates into having more choices, including a choice about whether or not to continue working.

Many female business owners tell me they worry about retirement planning, yet only about 1 in 4 have designed a written retirement blueprint.

For example, according to business exit researchers, fewer than 9% of professional women and entrepreneurs have viable succession strategies or retirement income plans.

Even though these women know they must find ways to maximize their business valuations to help fund their retirement, most haven’t acted.

So, how will those clients close the gap between their concerns about running out of money when they no longer work and the actions necessary to ensure that does not happen?

Here are some things I do for retirement income clients who face this kind of planning gap.

1. Reframe retirement as “achieving financial independence.”

Tell clients that financial independence means getting rid of all the “have-tos” in their lives.

2. Advise clients to create a vision of their ideal after-work lifestyle.

Here are some questions to pose:

  • Will you continue to work part time?
  • Is travel in your future?
  • Will you downsize or move to another state?
  • Are you responsible for providing for adult children or grandchildren?
  • In what ways will your life be fundamentally different?

A client should sit down and quantify how her monthly expenses will change, to understand how much income she’ll need when she stops working or sells her business.

3. Run the numbers.

Although the many free online calculators available have their limitations, such as their inability to help clients evaluate the impact of inflation on expenses such as health care or insurance, they can provide your client with a baseline with which to work.

Your clients can put together simple retirement projections that will help them start thinking about how much capital they’ll need to retire successfully.

Many clients’ calculations will reveal funding gaps.

Finding the gaps is a good thing, especially when the clients still have time to work with you to bridge the gaps.

4. Help clients diversify the right way.

Diversification of your clients’ assets is crucial to them having better lives after work, and they must achieve diversification strategically.

The tools and products clients used to accumulate funds don’t work well when the time comes to convert that cash into income streams.

The closer clients get to their retirement dates, the more they’ll need to begin rebalancing their portfolios.

A client will want to develop a blueprint that increases the safety of her assets, locking in gains and making every dollar do the work of three or four dollars.

It’s a challenging but not impossible task.

You might suggest adding safe money products, such as annuities or life insurance, to give your clients greater peace of mind.


Eric HutterEric M. Hutter is president of Osprey Retirement Solutions in Palm City, Florida.