Advising Clients on Retirement

Source: AICPA CPA Insider

The following includes excerpts, reproduced with permission, from an article by Kemberly Washington.

Whether your clients are in their tender 20s or nifty 50s, it is never too early or late to begin building a nest egg. Inquire about where they see themselves in retirement; understand where they are now and, more importantly, what it will take to get them where they need to go.

Listen to Your Clients

• Where do your clients see themselves when they reach retirement age? Sitting on the sandy beaches of Florida? Or working day to day until the good Lord calls them home? Review your client's financial picture to determine which expenses can be eliminated in their retirement years to estimate the amount needed to fund a comfortable lifestyle during retirement.
• Where are your clients now? Are they active in their current employer's plan? If they are self-employed, have they considered establishing a retirement plan? Determine whether they are taking advantage of tax advantage accounts and/or employer matching contributions. These options can provide funding that would allow clients to reach their retirement goals faster.
• Are your clients able to sleep at night if their investment portfolios decrease sharply? Analyze your clients' current holdings to see whether their current holdings are in line with their financial goals and risk tolerance. Careful planning can increase the probability of your clients reaching their financial goals in a timely way.

Understand Your Clients

One size does not fit all. What may work for one of your clients may not necessarily work for the other. As their trusted adviser, it is your responsibility to let your clients know when they set lofty unrealistic goals. Stay positive and offer alternatives that would fit their lifestyle.

For the complete article, read “Are Your Clients Prepared for Retirement?”

From AICPA CPA Insider, January 17, 2012, www.CPA2biz.com.