Retiring with Dignity

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By Alexandra DeFelice

Can baby boomers retire with dignity, or is it no longer in the cards?

Financial planners have what it takes to help their clients – and themselves – avoid working into their 80s and beyond. They just need to have honest conversations with clients about their future desires and help them avoid mistakes.

During a presentation for AccountingWEB Live! in Dallas this month, 1st Global CEO and founder Tony Batman and David Shill, champion wealth management partner of GPP Wealth Management, LLC, discussed mistakes and misconceptions people have regarding retirement and how to get ready for that next stage of life.

Social Security was designed as a safety net, not as a retirement plan, but that's not what most Americans think, according to Batman. Only one-third of Americans aren't dependent at all on Social Security to fund their retirement, one-third are slightly dependent, and one-third are completely dependent, he said. 

"Americans must take responsibility for their own retirement", Batman said. "Americans procrastinate when it comes to their financial affairs. Early financial planning is the key to retiring with dignity."

Shill recounted a story of when he received his first paycheck and his father asked how much of it he was going to put in the bank. Shill complained that the check was only for $350, but his father pointed out that was $350 more than he had the previous week, so saving some of it was possible. As a result of that conversation, he started saving every month.

Now, Shill works with the children of his boomer clients to make a difference for them early on. And he had some advice for boomers with children: "Don't take time off of funding your nest egg to fund your kids' education." Too often, he sees boomers making provisions for college. 

"Financial planners have an absolute need to educate clients that it's not about market timing or types of investments, it's about having a consistent plan and making smart choices", Shill said. "We never plan to fail, but we fail to plan."

Batman challenged financial planners to start managing their clients' behavior more than their money. Clarify their retirement vision by asking what they want to do when they retire, what their dreams are. Then work on their budgets and map out how to help them reach those dreams.

With the average life expectancy now being seventy-eight, if a husband and wife both reach sixty-five, there's a 50 percent chance both of them will reach ninety-two. That puts a tremendous financial stress on those retirement dreams, Batman declared.

In terms of delaying retirement, good things come to those who wait. The really good thing is that boomers don't have to wait an eternity, just a little longer.

The earliest any boomer should contemplate taking Social Security benefits is sixty-six, according to Shill, and the longer you wait, the bigger the reward.

"Many take Social Security benefits at sixty-two because they think it won't be there for them later. That's bologna", Shill said. "If you delay to age seventy, the benefit will be 132 percent of what it was at sixty-six. We still have many years before the benefits will be reduced, and it won't affect the boomers."

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About the author:

Alexandra DeFelice is senior manager of communication and program development for Moore Stephens North America, and a regional member of Moore Stephens International Limited, a network of more than 360 accounting and consulting firms with nearly 650 offices in 100 countries. Alexandra can be reached at [email protected].

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