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Actually, it’s always a good time for advisors to connect with clients when it comes to retirement planning and security, but October is particularly relevant on that front. The tenth month of the year and the first in the fourth quarter is about much more than Halloween. It’s also National Retirement Security Month.
The occasion deserves more attention and advisors would do well to make the most of it for a variety of reasons, not the least of which are the facts more people than ever are turning 65 years old every day and that the U.S. is facing a retirement crisis. Retirement security landing in one of the longest months of the year is pertinent for another reason: the level of comfort clients are expecting they’ll have in retirement.
A recent Nationwide survey indicates “more than three-quarters of pre-retirees (77%) said they expect to be at least moderately financially comfortable in retirement.” For many, “moderately comfortable” isn’t good enough and it’s a call for retirement security to be a point of emphasis for advisors in October and the other 11 months of the year.
Better Retirements Start with Better Advice
The above statistic about moderate comfort in retirement is telling for another reason: a lower percentage of retirees actually view their retirements as moderately comfortable.
“Yet, the same survey found that only 68% of current retirees said they’re actually financially comfortable in retirement. While this may seem like a small difference, it does suggest that about one in ten pre-retirees may find that expectations don’t match reality when it comes to retirement readiness,” according to Nationwide. “As professionals in this industry, it’s our job to bridge that gap.”
Advisors should take note of that, but so should prospects. A variety of studies confirm folks working with advisors are more satisfied with their retirements than those that are going it alone. That speaks to the importance of advice and having someone in your corner encouraging you get on the retirement ball and making it a priority. Translation: don’t delay saving for retirement.
“This is perhaps the best place to start for clients and participants who haven’t saved anything yet for retirement,” adds Nationwide. “The more time people give themselves to save, the more they can realize the benefits of compound growth. Building greater retirement security doesn’t need to be complicated. With clients and plan participants alike, simpler is often better.”
Planning Matters
There’s no overstating the importance of planning when it comes to retirement. That means connecting with clients on a variety of topics, including access to employer-sponsored plans, IRAs and where they plan to live upon exiting the workforce.
Then there are the clients that have already been diligent retirement savers, but they’re apt to need to professional advice, too, because some may be too heavily allocated to overly conservative investments or in the wrong asset classes altogether.
“For those who are already saving this way, think of opportunities they may have to increase their savings,” concludes Nationwide. “For example, they should consider saving enough to maximize any matching contributions offered by their employer. IRAs are another savings vehicle that could benefit those without workplace retirement plans as a supplemental savings option. Investments in mutual funds, ETFs or target date funds could be another direction to explore.”