4 Ways to Help Senior Clients Reach Their Best Financial Future

Some senior clients who are approaching retirement may already feel confident their financial future is secure, but in America, a majority are facing increasing uncertainty with little to no savings. When older clients approach their financial advisor for help making their nest egg grow, some advisors might use the same strategies they do for every client. However, there are a few approaches that can be especially useful for senior clients who need to make the most of the time they have left to invest and grow their retirement savings.

Debt Management 101

If you review your client’s budget and see they are using more than 20% of their income to cover debt repayment, credit counseling or other support, this is probably a good idea. Sometimes seniors can achieve balance through targeting early repayment efforts to the highest-interest debt, while other times they may need to refinance or explore other options.

Help Them Diversify Investments

For some senior clients, the road to a better financial future begins with making more diverse investments.  Every client will be comfortable with a different balance of high-risk and low-risk investments. Even the most conservative person may be interested in the right bond or CD opportunity to put money to work outside a savings account. Get to know your client so you can make the best recommendation for their goals.

Make the Most of Financial Gifts

Many elders plan to make gifts to their younger relatives during retirement but may not be aware of the literal financial benefits those gifts can have in the right circumstances.  A “gift” is defined as any transfer of real or tangible property, such as money, a car, a house, and more. If no one individual is gifted more than $14,000, the gift is not taxed.

This is a strategy some use to try to lower their income for Medicaid eligibility as their medical expenses increase. However, clients need to know that the gift counts toward their income for five years. If someone wants to qualify for Medicaid at 65, they would need to make their gifts before age 60 to lower their income in enough time.

Liquidate Bulky Assets

Finally, financial advisors can help older clients achieve the best possible financial future by supporting an honest assessment of what the client will actually need in that future. Sometimes assets like multiple homes, vehicles, or life insurance policies become redundant. In those cases, seniors are making the same expensive payments on a regular basis without the same return. The advice of a financial advisor can help them determine when the time is right to sell those assets and use the cash to grow their savings instead.

One thing is for sure about your senior clients’ ideal financial future; it probably won’t look exactly like their past. That’s why options like a life settlement can be a great resource for certain individuals. If you’d like to learn more about the times we find life settlements bring clients the best value, contact me today.

Case Study:

Judith and Tom have been funding the lifestyle of their only child since graduation from college. Now that Judith and Tom have retired and are on a fixed income, they are burning through their retirement funds. Tom, at the advice of their financial advisor, has put a stop to this practice. Tom discovered he could sell his life insurance policy for $128k and used the funds to shore up their retirement account.

Leo LaGrotte