Retirement planning is top of mind for many consumers. In a recent study, 59 percent of respondents said that retirement planning is now a high priority, with 24 percent saying it had become their number one priority.¹

When engaging with clients who are interested in retirement planning, it is important to adapt your services to meet them where they are. Their retirement planning needs will vary depending on what stage of their career they are in, and so your approach to guiding their retirement planning must flex accordingly.

In this blog, we’ll explore how you can expertly navigate clients through retirement planning at each career phase—whether they’re embarking on new careers, navigating mid-career complexities, approaching retirement, or transitioning into that well-deserved retirement phase.

Early Career: Building a Foundation

When working with a client in the early stages of their career, the focus should be on improving their financial literacy and building a strong financial foundation. Retirement will feel a long way off to them, so they may not be ready to answer questions such as, “What does retirement look like to you?” or hold in-depth retirement planning conversations.

However, it is essential to emphasize the importance of starting to save early and taking advantage of employer-sponsored retirement plans and matching contributions. Financial planners working with early-career clients can do this by educating them on the power of compound interest. By demonstrating how saving even small amounts early on can outpace someone who starts later but saves for decades, financial professionals can motivate their clients to begin building their retirement nest egg from the get-go. Helping clients with features like target-date funds and selecting automatic increases to contribution rates can set them on a solid path.

Along with educating clients on the importance of saving now, you can set them up for success by leveraging technology to help them with budgeting, debt management, and saving. Technology features such as account aggregation and client portals will be invaluable in ensuring that they understand their full financial picture. By focusing on areas such as budgeting and debt management, you will enable your clients to build smart money habits and begin saving for their futures.

Mid-career: Setting Future Goals

As your clients enter the mid-career stage, they may be ready to begin to discuss retirement goals in more depth. Activities such as projections and hypothetical scenarios related to your clients’ envisioned retirement lifestyle may begin to play a role in shaping their financial roadmap. You and your clients may discuss taking steps to increase their savings and set initial retirement goals.

At this time, you will also want to delve into any additional major aspirations that your clients may have, be it acquiring a second home or funding their children’s college educations and weddings.  These goals must be factored into their retirement plan, as they will have a considerable influence on your clients’ savings capacity and the quality of life they can attain in retirement. Your client may have started to collect several retirement accounts with job changes. Conducting an investment review so the client can see their entire portfolio can shed light on potential blind spots.

Financial planning is an ongoing process, so it is important to begin holding regular reviews to monitor and adjust your clients’ plan as they continue to progress through these career stages and their retirement plans become more detailed. Utilizing a client service calendar can help ensure that these planning activities are held on a consistent schedule.

Late Career: Delving Into the Details

As you guide clients through the transitional late career stage, your focus sharpens on creating precise retirement expense estimates. This pivotal phase involves carefully evaluating every aspect of your client’s future lifestyle, such as their housing choices, travel aspirations, healthcare needs, and other potential expenses they may encounter in retirement.

Along with determining their estimated expenses, you will want to look at how those expenses will be covered and start putting together a detailed withdrawal strategy. This strategy should consider their various income channels, such as social security, pensions, and retirement savings. Your role is to ensure that their plan can pragmatically fund their envisioned retirement lifestyle in a tax-efficient and sustainable manner.

What-if planning should also take center stage. Financial planners should stress-test the client’s retirement plan for risks like higher-than-expected healthcare costs, longevity, taxes, the potential need for long-term care, and the effects of inflation over time.

Regularly reviewing the plan and making necessary adjustments continue to be vital components of financial planning during this stage, allowing you to stay proactive and keep your clients’ financial futures on track as retirement nears.

Retirement: Implementing Their Life’s Plan

Once a client enters retirement, your focus as their financial professional will shift to two key areas. Income distribution takes precedence as retirees will rely on their accumulated assets and investments to sustain their lifestyle. It is crucial that you guide your clients in implementing efficient and sustainable withdrawal strategies across their various accounts and income streams to ensure a stable and secure retirement. By providing tailored guidance and strategies in income distribution, you can empower your clients to navigate this new phase with confidence.

Estate planning also becomes top of mind during retirement. Leaving an inheritance and ensuring assets are properly distributed is a top priority for many retirees. Legacy planning extends beyond just the financial aspect, however. It’s crucial to have plans in place that allow heirs to locate and access all relevant accounts, documents, and information in our increasingly paperless world. This transition planning ensures a smooth handoff of not only monetary assets but also digital assets and important records.

Navigating the complexities of retirement income, estate laws, and legacy planning can be daunting. Planners can act as a quarterback for their clients, leveraging their referral networks to connect clients with legal and tax professionals where appropriate. This invaluable guidance can help retirees feel confident in their strategies while achieving their desired outcomes for themselves and their beneficiaries.

Be Your Clients’ Retirement Guide

As a financial professional, your ability to anticipate the evolving needs of your clients is key. With an understanding of the focus areas for retirement planning at each phase of your clients’ careers, you will be well-equipped to guide them toward a successful retirement. And no matter what phase of their careers your clients are in, remember to keep your conversations positive. Your clients may be experiencing a host of worries and guilt when it comes to their finances, so being encouraging is key.

For more retirement planning tips and strategies, check out the articles Monte Carlo Simulations: Sparking Conversations That Matter and Bring Client Retirement Goals to Life in Vivid Color.

Sources:

1. Moving Forward: Planning for the future in changing times. AIG. February 2022.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

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