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How to help clients realistically prepare for retirement

Posted on Thursday, May 23, 2019 by Abby Draper

An elderly person is walking a dog down a road surrounded by trees.

By Rebecca Kerr, OSCPA communications intern

In an AICPA blog post, author Adam Junkroski described a scenario in which a couple who were about to retire had unrealistic hopes and expectations for their retired days ‒ exotic beach vacations and trips to Austria to name a couple of their ideas.

Although the couple in the story had been in contact with their CPA for several years with the intention of being proactive in their retirement saving strategy, these expectations were simply not attainable in the eyes of their CPA. Basically, it was bound to end in an awkward and uncomfortable conversation with her giddy clients.

AICPA said there are a couple of easy steps that could have been taken by this professional that might have instilled a more realistic vision in their client. The three tips they suggest include:

1. If they’ve planned ahead by coming to you, prepare them for multiple outcomes.

Junkroski wrote, “every retirement plan is different when done correctly: tailored to income, savings, client lifestyle, etc.” For this reason, there is no “one size fits all” and no guarantees when it comes to these plans. However, it is the responsibility of the CPA to gather information early and often pertaining to the post-retirement expectations and “wish list” of their clients.

These expectations, for example, the desire to live a lavish instead of a minimalist lifestyle, will directly affect the route you take in a saving strategy and how you choose to advise your clients. It will also give you the opportunity to voice any concerns or doubts you have about your clients obtaining this dream retirement lifestyle upfront to avoid any uncomfortable conversations when it is too late to change course.

2. Ask clients if they’ve thought about “plan B.”

In the same vein as the first tip, it is essential to ask your client to have attainable and fully thought out back-up plans should their “plan A” prove to be too much of a challenge.

The AICPA article provided some good questions to ask about this: “What can be compromised on or what alternatives are there to your primary retirement goal?,” “Do you want money left over for your family to inherit?” and “Do you think you’ll need a large amount of money set aside for any medical expenses that might arise in the future?”

3. Don’t be afraid to be honest.

It is always better to be upfront with a client rather than allowing them to believe an unrealistic expectation is possible.

“Managing expectations means being frank about the reality of your clients’ situation,” Junkroski continued, “engage your clients and make them an active part of their retirement plan.”


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