How Do You Talk to Someone About Their Retirement?

Talking to a new client about their plans for retirement is the first step a financial advisor takes toward helping clients retire. This is a chance to learn the client’s long-term goals and current finances. Then it’s possible to chart the course from the client’s financial standing today to where they want to be in the future.

But starting and guiding these conversations isn’t always easy. Each person will respond differently, and financial advisors may suggest unique transactions and investments to meet client needs accordingly. Here’s how a trusted advisor can handle these conversations successfully and some of the topics you might want to bring up.

Helping Clients Navigate Retirement Procedure for Employers

One of the first things that usually comes up in a conversation about retirement is whether the client has an employer-sponsored retirement plan. Drawing from these accounts for funds during retirement is different than drawing from an individual retirement account or pension plan.

  • Employer-sponsored retirement plans are funded pre-tax, so distributions will be taxed at the time funds are withdrawn.
  • Individual retirement plans are funded post-tax, so distributions will not be taxed when funds are withdrawn.
  • Pension plan payments are taxed as regular income when they are received.

Part of your role as a financial advisor is helping the client understand when it makes sense to take withdrawals from one of these accounts. In the case of some accounts, the client might be required to start taking income at age 65, even if they do not choose to retire. In addition to advising on these matters,  you may also be asked to help them navigate how to access the funds in these accounts, and answer their tax questions.

Is It Rude to Ask Someone When They Are Going to Retire? 

Asking about retirement plans is always acceptable for a financial advisor, unless you’re in a situation where the client has made it explicitly clear that they don’t want to discuss those plans. Your clients are coming to you for advice about their financial future, including after they stop working. Even those with mixed feelings about retirement are likely to be open to discussing their goals, worries, and ideas with a financial professional who can help them gain peace of mind. After all, that is what they are paying you for.

Candid discussion about questions like “how much money do you need to retire comfortably” and “what to expect when you first retire” may help some clients navigate their mixed feelings and feel better about what lies ahead. This will let them know what kind of money will be available to them and allow them to anticipate and get excited for any changes in lifestyle such as downsizing or a move.

What to Say to Someone Who’s Going to Retire But Needs Financial Advice 

As a financial advisor, it’s your role to help reassure the client that every bit they can save will be helpful. Explain concepts like compound interest to show how their savings will grow over time, even if there are only a few years until retirement. Remember to keep the conversation positive and encourage the client to think about creative ways to grow their savings and wealth in the time they are still working.

Financial advisors are increasingly called on to work with older clients who may not be fully prepared for retirement. According to the US Census Bureau’s Survey of Income and Program Participation, 47-50% of Americans aged 55 to 66 have no retirement savings at all. Among those who do have savings, CNBC reports the median 401(k) balance is just over $35,000. For many people, the prospect of retirement brings up anxiety about finances, even among those who have significantly more savings. With the average lifespan getting longer, even those with robust retirement savings need to get the most out of every dollar they have, and every asset in their portfolio. 

How Life Settlements Can Help With Retirement Planning

A life settlement is a unique transaction that can be a valuable tool for individuals who are 65 and older to gain liquidity and reduce recurring expenses. In a life settlement, your client can sell an unwanted or unneeded life insurance policy in return for a lump sum of cash. A life settlement yields significantly greater returns on the policy than surrendering it back to the insurer, gaining your client a return of tens or hundreds of thousands of dollars versus a few hundred dollars that would be gained through a life insurance surrender.

Additionally, the client does not have to sell the whole policy. They may sell a portion of the benefit while maintaining some of the policy for their heirs–but the investor who purchases the policy will pay the whole premium. Through a life settlement, life insurance can be maintained for future generations while the policyholder is relieved of the full cost of the premium payments.

Talking to clients about retirement is usually a fun conversation, even when reality isn’t perfect. Useful tools like a life settlement help advisors deliver the best possible outcomes to their clients and meet their fiduciary duty. To learn more about these life-changing transactions, please reach out to us at 1-888-849-0887 or complete our contact form.

Did you know you can sell all or a portion of a life insurance policy, even term insurance? Selling an unwanted life insurance policy is no different than selling your car, home or any other valuable asset that will create immediate cash. Contact us today to learn more.

Get in touch with Life Settlement Advisors today to take the first step toward converting your policy into cash.

Get in touch with Life Settlement Advisors today to take the first step toward converting your policy into cash.
Life Settlement Advisors
Leo LaGrotte
At Life Settlement Advisors, we strive to be a voice of confidence and assurance for our clients. Our goal is to educate you about the life settlement process so you can make an educated decision about whether it is right for you.