As clients’ ideas about retirement evolve, advisors will need to look beyond the numbers to help their clients successfully navigate the transition.
A report based on surveys of 750 high net worth investors Savant Wealth Management and study and consultancy store Absolute commitment highlights the changing attitudes of investors towards retirement.
Although 54% of those surveyed said they would work full-time and then stop working altogether, 30% said they would switch to paid part-time work first. According to the report, an additional 16% said they would switch to unpaid or volunteer work when they quit their current careers.
The survey, which included investors with assets ranging from $ 500,000 to over $ 5 million, was conducted in April and May 2021.
Rob morrison, Savant’s chief strategy and innovation officer, says working with retired clients “becomes more than just a mathematical equation of solving the retirement ‘number’.
“It helps clients think about and try out different variations of what they want life to be like,” he said.
Advisors are expected to discuss topics such as wellness and longevity with clients, he added.
“It’s about engaging in more open planning discussions about lifestyle,” Morrison said.
Investors often start thinking about retirement in their mid-50s, but if a client brings it up sooner, advisors should start helping them think about how they want to live their “next chapter,” Morrison said. Events like divorce or the death of a loved one can sometimes trigger anxiety or a desire to plan for the long term, he added.
Starting early can help clients develop a clearer plan. And an April 2020 Gallup poll has shown that most American workers expect to retire at age 66.
“Often, clients may be reluctant to open up and discuss their lifestyle early for a variety of reasons,” Morrison said. Counselors need to build on the relationship they’ve cultivated over the years to help clients think about the kind of lifestyle that will make them feel fulfilled, he said.
And sometimes advisers need to control client expectations. “Customers can really benefit from low-high spending scenarios over what their resources will cover now and in a few years. It helps the advisor explore options with clients to save more, work longer, or consider working part-time in retirement to meet those aspirations, ”he said.
Sometimes that means “reshaping” goals and helping clients “try out” different lifestyle considerations in the moment, ”Morrison said. The goal is to make the client feel comfortable and feel they have a workable plan.
The pandemic has been “a mass catalyst” to reimagine retirement, thanks to the increase in flexible working arrangements.
“A big part of this is that employers were forced to make a change when they might have already dragged their feet to allow employees to have personalized scenarios or non-traditional arrangements,” he said. -he declares.
Barbara archer, a partner with Hightower Advisors in St. Louis, says that probing clients’ long-term goals can lead to a deeper relationship.
“The financial part is the simple part from our point of view because it’s what we do every day and it’s what our clients expect from us,” said Archer, who added that she often uses Monte Carlo simulations with clients to help them understand their probabilities of meeting goals.
“But then we have to tackle all the other areas when we have conversations: the mental, the social, the physical, sometimes even the spiritual aspects of retirement,” she said.
Once a client is financially secure, the question of a “new sense of purpose and a new identity” arises, Archer said.
Often, clients express concern about being bored in retirement or joining a new community if they move, she said. Sometimes they want to discuss legacy planning, develop hobbies, or ask to be introduced to someone who can help them get through the changes.
“It’s usually a deeper question. We wonder about the difference between a happy, meaningful or psychologically rich life? Because at the end of the day, we want to feel like retirement is fulfilling, ”said Archer.
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