Complex Lego Sets Vs. Retirement Goals

 The other day my son and I were building a complex lego ship. I was sitting on the ground with him trying to follow the directions. Who knew building a lego ship could be so complicated? Then I began to think about our clients. This must be how they feel when they are trying to put together their financial pieces and figuring out how they are all going to fit together to reach retirement.

As you can see in the picture above there are thousands of little tiny pieces some are blue, red, white, yellow. Similarly with our clients there are a million financial aspects to their lives. Do they want to move states when they retire? Do they want to live a legacy? Do they want to take social security at retirement or to they want to delay? Should they take money out of the 401k at 55 when they retire or roll to an IRA and let the money grow? In my experience, there are many questions like these that will come up in our clients lives. We do not have to be the experts but we need to be the partner in our clients lives that can get them to the solutions. 

There have been many questions that have come up with regards to goal planning.

The first topic is Social Security. We have all heard it –the warnings Social Security Trust Fund is on track to become insolvent in 2035. The social security administration current estimates at that point, taxes will only cover 75% of scheduled benefits. When I was in your role I had to have this conversation with all my clients who are trying to plan for their future income in retirement. 

The Social Security team is trying to work through a couple of fixes. Our clients may not like any of the resolutions:

1. Raising the full retirement age
2. Increase or eliminate the payroll tax cap (social security tax only applies to earnings up to $127k, wages above currently are untaxed but could be in the future)
3. Reduce benefits for higher net worth households

The great thing is that you can start now to plan with your clients for some of these variables and what the realistic expectations our clients can experience if these changes were to be put in place. Dealing with client’s money is an emotional business. By taking them to the “what are you afraid of section” in goal planning we can alleviate some of these concerns and help them to plan now for the future. 

  Second topic the back office is having with you FC’s is client portal. Giving our clients peace of mind to look at the plan and make adjustments as need when their lives change. Our investors are going to become more prudent investors by giving them full access to see their results and make decisions that will best impact their retirement lifestyle.  

1. For our clients in their 20s/30s they are going to see the road map of how investing in their 401k’s and IRA’s.
2. With our clients in their 40’s they are going to see how their assets are going to be working if there is a reduction in SS could affect their dreams. 
3. For our clients in their 50s going through the goal plan and determining if they can live our retirement comfortably or if they need to push off retirement a couple more years or simply down size. 

I have worked in this industry for 10 years now. I have seen a lot of different ways advisors can work with their clients. We have the opportunity now to holistically view our client’s investment assets and strategize with them to make the best possible investment decisions through the IMS program or the Advisor Director program based on their needs.