When clients are concerned about having enough money in retirement

If your clients have enough money for retirement but worry about how to generate their income, Adrian George, CFP, TEP, breaks down their savings into five areas:

  1.    Minimum guaranteed income
  2.    Risk management
  3.    Discretionary spending
  4.    Toys
  5.    Estate goals

This connects their assets to what they want to achieve, rather than a linear plan of a fixed income amount. “This helps them truly understand and connect with their assets, rather than shopping for the best rate in a fruitless search for yield,” said the 14-year MDRT member from Calgary, Alberta, Canada.

If the client doesn’t have enough money, George can address their retirement concerns in a few ways, such as reduced working hours but for longer than their full-time planned retirement date, or planning to start their own business.

Business owners have a different challenge: primarily, the power shift from being the one producing their income to being reliant upon another to produce it. “That’s a very intimidating shift for them and is often the real concern about their retirement income planning,” George said.

If a couple has different levels of risk tolerance

“I call it a diversified plan when one person is more risk-oriented while the other is more risk-averse,” said Sylvia Brim, CPA, CFP. In this situation, she’ll create a balance between their employer plans and their personal accounts.  

“After a year of investing according to their risk tolerance, we compare the performance, then adjust based on their comfort level,” said Brim, a 31-year MDRT member from Cedar Rapids, Iowa. “Risk changes with age and current situations, so we address it annually.”

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