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Retirement planning beyond the money
Retirement planning beyond the money

Sep 01 2023 / Annual Meeting

Retirement planning beyond the money

We do our best to help our clients prepare financially for retirement, but should we take it a step further to prepare them personally as well? Learn McNeely’s tips for helping your client build a personal retirement readiness plan in addition to their financial plan — and watch them live the retirement they always dreamed of as you strengthen your relationship with them.

By Juli Y. McNeely, CFP, CLU

Topics Covered

Life gets busy. When we are working, raising a family and juggling all of the pieces of our lives, we often don’t have time to pause and consider what life will look like once we are not working, and we are empty nesters. Retirement seems so far away at times, but it comes faster than you might think. Making sure you are personally and financially ready doesn’t have to be a daunting task. As your clients approach retirement and move from accumulation to distribution, we can help guide them by talking through their desires and dreams, getting them prepared for retirement and ready to write a new chapter in their book.

Our team has developed a list of talking points that somewhat mirror the MDRT Whole Person concept (coincidentally or not). The talking points can be done with the advisor or on their own. It is astounding how many clients haven’t had these deeper conversations and believe that they will just “wing it” when they get to retirement. Oftentimes, it’s as easy as verbalizing something that you have thought about but never shared with anyone else.

The Personal Retirement Readiness Talking Points center around these main themes:

  • Hobbies/interests: Do you have hobbies and interests that you will carry into retirement with you, or will you cultivate new things you want to try? Will you do them alone or together as a couple?
  • Family time: Balancing your retirement and vacations with lots of family time seems likely, but do you need to put some parameters or boundaries around that time? Will you find yourself caring for aging parents or dependent children?
  • Friendships: How will you connect with friends after you are no longer working? Do you have individual friends and joint friends?
  • Financial: Discussing the gaps in your financial picture as well as making sure you are in alignment with your partner is critical. Making sure you know how you will handle overspending and underspending, as well as gifting and charitable plans, will also be beneficial to discuss before you get too far into retirement.
  • Risk: There are many things that can cause risk in retirement, such as a major health or long-term care event. How you mitigate those risks is worth significant conversation prior to the unexpected.
  • Taxes: As we know, taxes don’t go away in retirement. Making sure our clients have a good CPA/tax provider is critical. We also want to make sure we are in alignment with the tax-reducing strategies we utilize.
  • Estate: Making sure our clients have their legal documents in order and a solid estate planning attorney is a critical piece to having a worry-free retirement. This includes reviewing beneficiary designations often and discussing and mapping out a plan for gifting and charitable contributions both now and at death.
  • Travel: What types of travel destinations are on your bucket list? Will you have a second home in retirement?
  • Work after retirement: What will you do if one spouse is still working, and is there a solid exit strategy for their eventual exit as well? Do you have an encore career in you, something you’ve always wanted to do? Is there an exit strategy for the encore career?
  • Legacy: Reflect a bit on how you want to be remembered and how you want to bless those who are most important to you.

These categories are simply talking points but get the conversation started on topics that often get lost in busy life. Of special note, if your client has a business interest, much more significant time should be spent on the exit strategy so that the client is able to convert perhaps their largest asset into cash or an ongoing cash flow. In most cases, clients who own their own business have made the success of their business their priority. Making sure they have a solid plan for “life after owning a business” will be essential to them being able to exit their working life and begin a new chapter.

Painting a picture for your clients and then a road map to guide them through these conversations and, ultimately, decisions will be welcomed. It will also tie them closer to you and your firm. We have also experienced a significant number of referrals because other advisors aren’t doing this with their clients. We are all great at helping our clients financially prepare for retirement, but could we be doing more? I believe we are perfectly positioned to ensure our clients have a robust Personal Retirement Readiness Plan. So when you ask your clients, “Are you ready?” they will be able to answer, “Yes, in every way I’m prepared for retirement!”