While 73% of retirees have retirement savings, only 45% of adults feel confident that their retirement savings are on track. Considering that the average retirement age is 61, you can expect many of your clients to worry about affording retirement, especially when they're approaching the end of their careers.

This article and the downloadable guide linked below can help you prepare for these conversations and answer clients' questions about when they can afford to retire. 

Client: "When Should I Plan To Start Receiving Social Security Benefits?"

At this point in the conversation, if you still need to discuss your client's projected expenses in retirement and sources of income, stop. Clarifying these details before proceeding is crucial, as this information will drive the rest of your conversations. 

You already know that your client will receive the largest Social Security benefit if they wait until 澳洲幸运5官方开奖结果体彩网:full retirement age (FRA), but this may not make sense for every client. Consider their other sources of retireꦫment income, projected expenses, goals, and physical and mental health. 

The Social Security Administration website offers that you can use to show your clients what 澳洲幸运5官方开奖结果体彩网:claiming benefits early or waiting to reach the full retirement age could mean for them. Take this calculation one step further and use a 澳洲幸运5官方开奖结果体彩网:breakeven calculator to show them how much taking 𒁃social security before FRA will cost in dollars and cents over their expected lifetime. The difference between $1,000 and $700 a month might not sound like much, but the cost can add up over a lifetime. Can they afford to🅘 lose out on that? 

Client: "Are There Any Expense Considerations That I Still Need to Account for?"

In retirement discussions with your clients, it is prudent to bring up any potentially unexpected expenses they may encounter in the future. 

Your clients who are planning to retire and wondering about Social Security will likely also have questions about Medicare. You don't have to be an expert in this, but having a basic understanding of the expenses associated with Medicare is a good idea. 

Medicare, with its supplemental add-ons, is a relatively comprehensive medical plan. However, there are no add-ons for 澳洲幸运5官方开奖结果体彩网:long-term care, and clients entering their sunset years need to start thinking about this eventuality. Keep in mind that 70% of adults who survive to age 65 need long-term care services before they die. At least 48% will receive some paid care over their lifetime. If your clients haven't given much thou🐼ght to this aspect of retirement planning, you may consider offering them long-term care policies or a life policy with conversion capabilities to reduce future unexpected expenses. 

Client: "How Can I Reduce Retirement Expenses? Should I Think About Downsizing?"

Understanding your client's financial situation, including their monthly expenses and estimated retirement income, is crucial. This not only shows your commitment to their financial well-being but also helps you provide tailored advice. 

Your clients may only need to reduce their monthly expenses slightly. They can do this by tracking their subscriptions to streaming services or watching for sa𝓰les on commonly purchased goods. 

If your client is looking at a more significant disparity between their 𝔍expenses and income, suggest ideas like getting by with one car instead of two or reeval💎uating needs versus wants. 

For some clients, 澳洲幸运5官方开奖结果体彩网:downsizing their home is the best way to reduce their monthly expenses. On paper, this option makes a lot of sense: Reducing monthly costs by lowering mortgage, utility, and insurance payments are all ways to cut costs. However, selling the family home can be a hugely emotional decision for many people. You should be direct but gentle if you see no way around your client downsizing. It may also help to offer them the name of a real estate agent who may help them with this t♔ransition. 

Client: "How Much Can I Withdraw From My Retirement Plans Each Month to Supplement My Income?"

Clients asking this question are probably concerned about outliving their income in r🍎etirement. As thei♌r advisor, the best way for you to put their mind at ease is to model different scenarios.

If your firm doesn’t have proprietary software, you can use the safe withdrawal rate or the 澳洲幸运5官方开奖结果体彩网:Monte Carlo simulation꧃ ꦺto run some numbers for your clients quickly. 

Offer some modeled options for your clients so that they can see different possibilities of withdrawal rates. Just because the suggested withdrawal rate is 4-5% does not mean that this amount makes the most sense for your client. Consider their expected expen🍷ses and vario🧔us sources of income. 

Client: "Should I Be Worried About Market Volatility?"

Investors who lived through the market crashes in 1987, 2001, 2008, and, most recen𝐆tly, 2020 may be concerned that another event like this may wipe out their retirement savings. The worries are valid, but this is where you really earn your paycheck. 

Retirees who are adequately diversified and do not overdraw from their accounts needn’t worry nea𝓡rly as much about market volatility as those who are under-diversified and treat their investments like blank checkbooks. 

I𓂃t will help if you review their investment portfolios with them to ensure they are diversified and entering into capital preservation mode as they approach retireme🉐nt. 

Client: "Are There Tax Professionals You Recommend to Help Me With Tax-Smart Strategies?"

You probably have developed a relationship with a tax professional who can advise your clients on strategies when approaching retirement. If you haven't yet, you should do so. Having an expert to answer the nuanced questions about taxes is what makes good advisors great. 

The Bottom Line

Answering your clients' questions about whether they can afford to retire this year is far more complicated than a simple yes or no. Even though most clients over 60 will have some retirement savings, many still need to determine their financial readiness. 

As an advisor, you should use tools like pre-meeting questionnaires, breakeven calculators, and Social Security benefit calculators to guide your conversations and model your client's future income. In addition, you should prepare for the meeting by reviewing their portfolio diversification and gathering quotes for any products that might reduce unexpected retirement expenses.