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Five Questions To Start a Retirement Planning Discussion

by John Grogan

Absent guidance from financial professionals who can focus on the bigger picture, many well-intentioned people get caught up in the treadmill of daily living and put off any serious long-term financial planning until it is too late. A recent study by my company shows that half of Americans don’t have a financial plan in place and 63 percent say their financial planning needs improvement. The lack of a financial safety net is worrisome, but it is also an opportunity for advisors to make a real difference.

How can advisors help? Our 2013 Planning & Progress Study found that Americans largely recognize that time is eating away at their money, and half admit to being less financially secure than they’d hoped at this point in their lives. Only 43 percent feel financially secure. Advisors need to initiate a dialogue with their clients about planning for long-term goals, and it has to focus equally on growth and protection.

We believe there are six key retirement risks to address – unplanned market losses, living longer than you planned, inflation and taxes, healthcare costs, long-term care risks and leaving a legacy. Each of these have to be factored into a long-term plan, alongside one’s financial goals, risk appetite and time horizons.

To initiate the dialogue, here are five good questions to discuss with clients:

1.  What are your biggest concerns about retirement and longevity? What excites you about retirement?

They may seem like obvious questions, but too few financial advisors take the time to really listen for the answers. The best way to help clients is to actually listen to them. By listening, you’ll determine whether your clients have thought much about retirement, if their expectations are in line with their assets, and if they have financial worries keeping them up at night. For couples, you’ll learn whether they share the same retirement vision, or if they’ve talked to each other about retirement at all. In most cases, the constant juggle of day-to-day demands has sidetracked them from any serious discussion, and the questions will be a welcome opportunity to focus.

Whatever the initial response, advisors shouldn’t rush into problem-solving or quick fixes. Instead, advisors should continue asking probing questions to better understand the clients’ end game first, and then offer needs-based, long-term solutions that can weather the zigs and zags of market cycles.

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