Everyone ‘knows’ the typical retirement age is 65, right? Do you find that many of your clients continue to cling to that age, even if it’s not advisable – or possible – for their unique situation? As a fiduciary and true financial counselor, it’s your job to help your clients decide what their ‘true’ retirement age is regardless of what they (or anyone else) thinks it should be. So how do you go about that? There are a number of factors involved in choosing the perfect retirement age, and the financial aspect is just one part of the larger picture. Here’s what you should consider and talk about with your clients to help them make the best decision.
How much money they’ve saved
As you help your clients get their financial houses in order, you’ll be able to get a clear picture of how much they have already saved for retirement and how much they are likely to have by the time they want to stop working. You should also know how much their living expenses are and if they’ll be financially able to retire at age 65. If they’ll have plenty and can retire earlier or if the math just doesn’t add up and they’ll need to save more or work longer, you can help them adjust their expectations.
If they enjoy what they do
You probably have some clients who just work for a paycheck and truly live their lives in the evenings and weekends when they’re not in the office. However, you likely have plenty of others who really enjoy what they do and base a lot of their self-worth on their careers. There are thousands of examples of people retiring and struggling to find meaning or purpose in their lives afterward. If your client loves what he or she does for a living and is physically and mentally capable of continuing to work, there’s no reason they need to retire at 65.
Their family situation
Your client’s family situation could have a big impact on when they want to retire. If your client has adjusted to being an empty nester well but wants to spend more time traveling to see their kids or grandkids, earlier retirement could be desirable. On the flip side, if their spouse has recently died, they live alone, or they get a lot of their social and relational interactions at the office, pushing retirement to an older age might be the better plan.
Hobbies and other interests
When you get curious about your clients, you can learn a lot. Not only will this help you be a better advisor because you’ll know more about their situation, but it will also deepen the relationship and establish trust. As you ask questions about their lives, find out what they like to do in their spare time. Do they love to travel and live for the times they can take off work and hop on a plane or boat? Do they fill their free time with golfing, woodworking, or writing mystery novels? Those clients who have a number of hobbies and interests outside of work will likely be better candidates for early retirement than those who get most of their fulfillment from their jobs.
When to retire is a very personal decision that should first be based on financial ability as well as physical and mental health. Once these two issues are explored, you can go on to help your clients realize the more nuanced aspects of retiring so they can make the decision that is best for them and their families.
Have questions or comment about helping your clients decide when to retire? Please leave them below!