Help Clients Feel Confident Every Single Year of Retirement
A Northwestern Mutual executive looks at a need many advisors overlook.
It’s funny how often we get hints about what’s to come in our own lives by listening to and learning from others’ experiences.
In college, I remember learning about careers and work through the stories of friends who were a few years older and out in the work world.
When our children were first born, my wife and I tried to learn from parents with children who were older than ours.
I’ve valued these “stories from the future” because they gave me time to consider how I might approach a similar situation or stage in life.
These days I hear more friends talking about their plans for or experiences in retirement.
Of course, the conversation is often focused on the active years of travel, golf, volunteering and time with family and friends — but we also discuss the time after that, when we all hope to age with dignity.
All the Phases
It’s important to consider all phases of retirement.
After all, about half of Americans who live to age 65 will develop a need for long-term-care services and support during their lifetime.
Planning well for this stage takes time because of the high cost of long-term care — made even more challenging by rising inflation.
According to Northwestern Mutual’s Cost of Care Calculator, the average cost of a home health aide today is $27 per hour — a cost that is projected to climb to $49 per hour by 2042.
While on average, nearly a third (31%) of current caregivers’ monthly budget goes toward providing care.
Those costs include professional support as well as expenses for services caregivers provide themselves.
To me, these “stories from the future” underscore the fact that life stages wait for no one, and that the advice people receive along the way can meaningfully shape their outcomes.
Advice-driven planning can make a big difference, especially when it comes to long-term care.
As professional “storytellers about the future,” financial advisors can deepen their client relationships — across generations — by being valued sources of advice and guidance when it comes to long-term care planning.
Planning creates more opportunity.
When it comes to long-term care, there are many factors to consider.
For example, is there a preference for living in an assisted living facility or receiving care at home? What capabilities do care providers deliver? How far away is the facility, what are the costs, and how might expenses be covered?
For a client who finds themselves needing to quickly answer these questions while also addressing the emotional stress of a loved one in need, the situation can feel overwhelming.
By planning ahead for their own long-term care needs, advisors can help clients ensure that their loved ones are never put into such a precarious situation.
And rather than placing the burden on the shoulders of others, your client can have the freedom and the power to consider the full range of opportunities for care, and to make these decisions on their own while they have the capacity to do so.
Planning creates more flexibility.
A long-term care event is difficult to react to on the fly.
And yet, 2 in 5 caregivers say they had no advance notice that they would be stepping into a caregiver role.
There could come a day when your client or their loved one may not be able to eat, bathe, dress, or get in and out of bed.
There may also come a day when that person endures a cognitive impairment such as Alzheimer’s or Dementia — disabling the person from recognizing their home, their family, or even you, the advisor.
If that day comes and no plans have been made, the negative impact on the individual and the family is often significant.
That’s why planning early on is so essential — because a wider range of good options can be considered.
When encouraged to take the time to think ahead and prepare, your clients will find there are an expanding number of ways that can help them navigate these difficult situations.
Of note, in the past few years, we have seen the emergence of new products that can flex with an individual or family’s needs depending on how their story unfolds.
This includes hybrid insurance products that are designed to meet multiple goals, such as helping clients pay for long-term care if needed, while at the same time providing all the core benefits of a permanent life insurance policy that can support goals such as funding retirement or leaving a legacy.
Planning creates more certainty.
More than anything, the best gift that planning provides is greater certainty and less fear about the future.
That’s because comprehensive financial planning can help free people from financial anxiety.
By having a comprehensive plan, clients can address a wide range of risks and create flexibility for when life creates complexity.
This includes managing long-term care costs alongside the other challenges that come with navigating a financially secure retirement: inflation, longevity, taxes, market turmoil and more.
Clients who have a plan for the full arc of retirement will also be the ones who tell others “stories from the future” and the steps they took to feel confident and prepared for the years to come.
Including working with you, their advisor.
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(Image: Adobe Stock)