- One in five American adults spend more time planning their vacations than managing their finances.1
- Providing clients with guidance on more than the money can help set your practice apart.
- Identifying your clients’ dreams of where and how they’d like to retire can help influence their financial strategies.
You know retirement planning involves more than saving. It includes helping clients with long-term thinking, so together you can help them plan the lifestyle they’d like to achieve.
Your experience places you in a unique position to help them make choices that will impact every area of their lives, from the big picture down to the details of where they hope to live and what they hope to do.
Equip them for the journey
Retirement is a journey — where will your clients’ take them? With today’s typical retirement lasting 8,000 days or more (roughly 1/3 of their adult lives),2 planning for it is more essential than ever.
The good news is, that’s the fun part! Tell your clients to think of it as planning for an extended vacation because they’ll be in control of how they spend their time. Planning provides the potential to combine their big, bucket list items with their ideal day-to-day. And much like vacation planning, the more they plan, the more they’ll have to look forward to.
Without the need to choose where they spend their retirement based on a job, they may find they have more freedom and control than they’re used to. With so many possibilities, it can be tough to narrow things down. Encourage them to identify their passion points, then pair them with practical considerations.
Have them define their dream
To help them get to their “where,” it can be helpful for them to know their “why.” This is the reason they’ll wake up each morning with a sense of excitement as they look forward to the day ahead.
Offer some thought starters for how they’d like to spend their time, such as: Are they spending the day with their family? Touring Prague Castle in the Czech Republic? Donating their time at a local charity whose mission is close to their heart? The fact is, it can be a combination of things, as long as they’re things they love.
The goal is to ensure they have access to their dreams so they can live life on their terms. For instance, if they want to spend time with family on a regular basis, they’ll need to live close enough to be able to. If they enjoy traveling frequently, it’s ideal to have easy access to a major airport.
Once they know (and potentially, even rank) their passion points, they can begin to hone in on the best place to be. In addition to knowing their “why,” another trick that can help them pinpoint their preferences is to ask them who they’d like to be spending time with, what they’d like to be doing, and what means the most to them.
Help them to know their options
Once they identify an area they’d like to live in (it may be where they live now), let them know they have several choices available. Start by mentioning the basics: they could stay in their current home, move in with a family member, or explore older adult communities ranging from independent to assisted living. The decision will need to take into account their current financial and physical status.
If they’d like to remain in their current home for as long as possible, they’ll need to be sure it can meet their needs both now and in the future. Do they have assistance with maintenance or housekeeping? Does their home have grab bars in the bathroom? Is it wheelchair accessible? While apartments offer fewer personal responsibilities, they also limit the ability to modify the space to suit one’s needs.
These days, older adults can choose from a wide range of communities specifically tailored to them. See our previous articles on independent living and assisted living to provide your clients with a deeper dive into the details. In general, the names say it all, with independent living options best suited for those living largely independently, and assisted living intended for those needing assistance with more basic activities of daily living.
Both offer the benefit of access to the individual level of care needed, as well as physical, intellectual, and social activities. Meals, housekeeping, transportation, and laundry service are also often included. While the amenities and services are undoubtedly appealing, the cost of living in some communities can often be cost prohibitive.
Provide a reality check
As your clients fine tune their plans, there are a few practical considerations they should take into account. This is where you come in. Provide personalized planning that finds the sweet spot between their goals and their means. Suggest simple steps they can take now to help get closer to their vision for the future.
- Budget — Be sure your clients have a retirement budget in mind and know approximately what it will allow. Suggest they compare costs on communities in their area of choice to see what’s within their range. If they own their home and want to make it accessible now or down the line, a Medicare Advantage plan may be able to help. Starting this year, Medicare Advantage plans may offer supplemental benefits that cover nonmedical services, including in-home modifications. However, they’re not available under fee-for-service Medicare.3 Even more importantly, help them determine how they’ll pay for housing in retirement — do they have supplemental income options that could go toward this expense?
- Taxes — Have them determine if there are any tax benefits to one location versus another. And if they own their home, have them confirm that the property taxes are in line with their budget.
- Health Care — Even if your clients are taking steps to live longer and better by protecting their finances and health, healthcare needs are likely to increase as they age. Encourage them to know their family history, assess their current condition(s), and be sure wherever they decide to live will have access to any care they might need.
Write their next chapter together
This next phase in your clients’ lives is the culmination of all they’ve done and who they’ve become. And ultimately, retirement should be an adventure that they get to choose. Together, you can work toward a solid financial foundation that will help them get where they’d like to be.
Things to Consider:
- Encourage clients to decide where they want to spend their retirement by identifying their dreams, priorities, and needs.
- Remind them to take into account their financial and physical status.
- Work with them to ensure their goals align with their retirement plan.
1 “You’re not alone if you spend more time planning your vacation than working on your finances,” CNBC, August 2019
2 “Why 8,000 Is The Most Important Number For Your Retirement Plan,” Forbes, April 2019
3 ”The Forgotten Middle: Many Middle-Income Seniors Will Have Insufficient Resources For Housing And Health Care,” Health Affairs, May 2019
Neither Transamerica nor its agents or representatives may provide tax, investment, or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.