Do You Know Your Clients’ Biggest Fear?

Filed under: The Advisor's Blog

They're enjoying the free time retirement bringsAs a CPA, you are intimately familiar with your clients’ financial situations. You’re also familiar with their fears about money. And if you’re like 57 percent of CPAs polled in a recent AICPA survey, your clients’ biggest fear is running out of money in retirement.

With the baby boomer generation expected to live longer than any previous generation of retirees, many are looking at 20, 30, or even more years in retirement. It should come as no surprise that many of your clients worry about outliving their money. As for what factors fuel these fears, the survey found:

  • 76 percent of CPAs said their clients worry about the cost of health care
  • 59 percent of respondents said they have seen an increase in the number of health problems affecting their clients over the past five years
  • 42 percent of clients have already experienced health care concerns that affected retirement planning
  • 26 percent have clients suffering from dementia, or whose retirement plans have otherwise been affected by dementia
  • Meanwhile, only 11 percent said their clients have taken proactive steps to address potential problems caused by dementia

Health care may be the biggest concern of retirees today, but it certainly isn’t the only problem they face. The same survey also found that retirees and pre-retirees have altered their retirement plans due to other major life circumstances.

  • 29 percent reported that their clients have to care for aging parents or other relatives
  • 18 percent have faced a divorce late in their marriages
  • 18 percent have lost jobs
  • 18 percent have adult children who have moved back into the family home
  • 30 percent have been impacted by income and market changes

If you find that your clients face these same fears, you have a prime opportunity to talk with them about retirement planning. As your clients’ main point of contact regarding financial matters, they look to you for help solving their biggest problems. And yet, 63 percent of respondents to the survey said that fewer than half of their clients had discussed Social Security maximization strategies with them. Only 21 percent reported that their clients are waiting until past age 70 to take their benefits, which indicates that many are not taking advantage of the opportunity to defer Social Security in exchange for a larger monthly check. And only 15 percent of CPAs reported that more than a quarter of their clients are using annuities to provide income in retirement.

If your clients are worried about running out of money in retirement, help them find ways to ensure a steady income stream after they stop working. Partner with a financial planner, and combine your tax and budgeting expertise with top-notch investment knowledge. Offering your clients a solution to their problems is the best way to ensure long, mutually satisfactory client relationships.

Investment Advisory Services offered through John P. Dubots Capital Management, LLC, CA License # 0822926