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:
- Minimum guaranteed income
- Risk management
- Discretionary spending
- Toys
- 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.”
your advice is very good for retirement planning