A financial advisor shoulders considerable responsibility. Not only are they advising and guiding clients when it comes to critical decision-making, but they’re also helping them understand retirement planning, financial literacy, and smart fiscal choices.

Teaching clients how to plan for retirement simplifies your job and gives them more potential to make the most of their investments. Plus, it can give you more financial assets to manage.

Although retirement planning and financial literacy are necessary elements of client success, the education process isn’t always easy. Here are some simple ways to teach your clients how to plan for retirement.

Teaching Clients How to Plan for Retirement

1. Don’t make assumptions about your client.

Although a client may appear knowledgeable in various areas of their financial life, don’t assume they understand the many intricacies of retirement planning. Many successful individuals of all ages and socioeconomic backgrounds are misinformed or unaware when it comes to managing their personal finances and planning for the future. During your first meeting, a client may approach you with difficult questions that you should be prepared to answer.

Additionally, retirement income planning can be daunting for many people. This phase of life is often associated with uncertainty and fear of fixed-income living — topics some people prefer avoiding, especially if they’re accustomed to living certain lifestyles.

Navigating Social Security benefits can also be confusing, even for the most financially savvy clients. The death of a spouse, divorce, or other factors can add numerous complications to collecting benefits. Plus, collecting too early or too late can reduce the total amount of funds received by retirees.

2. Take small steps.

Before providing retirement income insight that may benefit your client, you need to understand their expectations, current incomes, assets and liabilities.

To get a general idea of a client’s current financial situation and knowledge, ask them questions during your consultation such as:

  • When do they want to retire?
  • What kind of lifestyle are they hoping to maintain?
  • Do they have loans or debt?
  • Are they single? Married? Divorced? Widowed?
  • How do they plan on funding retirement (e.g., investment accounts, IRAs, 401(k), 403(b), annuities, pensions, Social Security and stock options)?
  • What are their planned expenses in retirement (e.g., mortgage, travel or vacation home)?
  • How will they pay for health care?
  • What insurance do they carry?
  • Have they set a budget for themselves? What is it?

Once you’ve obtained this information, it’s time to crunch the numbers. Help them calculate the ideal time to start claiming Social Security benefits, when they should pull retirement income from certain accounts (and how much), how to prepare for any unexpected taxes that they may owe in the future, whether they should convert funds from a traditional IRA to a Roth and how long their investments are likely to last them.


Learn how to navigate the widow(er) benefit with Social Security Timing.

3. Help clients set achievable financial goals.

In addition to teaching clients how to plan for retirement, creating realistic short-term and long-term goalposts will encourage them during their financial journeys.

Are your clients hoping to pay off their mortgage early? Do they want to be free of all credit card debt? Do they hope to purchase a camper or vacation home? Are they planning on traveling or donating to charity? Working toward these objectives can help clients think long-term, making them more likely to make smart financial choices in their daily lives.

Perform stress tests and pay attention to opportunities to assist in other areas of financial planning, such as insurance needs or help with portfolio management.

4. Show, don’t tell.

It may be cliche, but they say, “a picture speaks a thousand words.” Research proves a similar point. Before and after pictures work for selling laundry detergent, exercise equipment, beauty products, weight loss programs, landscaping and loads of other things. So why wouldn’t you show your clients a “before and after” retirement income strategy?

Creating visual explanations about your clients’ financial situations will resonate more than simply telling them you are making an impact. Show clients side-by-side comparisons of what their finances would have been without your retirement income strategy, and compare those results to the outcome if they choose to implement your recommendations. These visuals can be quite powerful in sealing the deal with new clients or adding services for an existing client.

Help Your Clients Achieve More in Retirement Planning

Although guiding families and individuals through retirement income planning is a major task, taking an educational tone with clients can make your job as a financial advisor more profitable.

Covisum’s Income InSight® was built with a clear understanding of how the strongest advisors grow their business. It allows financial advisors to build a roadmap for retirement and serve their clients better, showing them how long their finances will last, the impact of taxes on their retirement, and how various financial stressors could influence their ability to live the retirement they desire.

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