Address clients longevity challenge - image

Address clients’
longevity challenges

Four longevity challenges to discuss with your clients

Living longer is a reason to celebrate. Yet today’s longer life spans also present new challenges for financial advisors and their clients, including making income last while health, long-term care and tax costs may rise, and inflation and market risk become magnified.

Help prepare your clients for the possibility of living longer by addressing these four challenges.

Challenge #1:  Make income last
Without a plan to make income last, clients may need to curtail their lifestyles as they age – or live in fear of running out of money.

Conversation starter: “Adding a guaranteed income stream to your retirement plan is an important part of ensuring you never run out of money – not just for basic expenses, but for the lifestyle extras that you’re looking forward to in retirement.”

Challenge #2:  Access cash flow for unexpected expenses
The longer your clients live, the more likely they are to encounter expenses like a major repair on a paid-off home, a looming tax bill, or even financial support for a child or grandchild.

Conversation starter: “During this stage of life, an important component of your emotional well-being is having the financial freedom to help your children through a difficult time, contribute to a grandchild’s education, make a luxury purchase, or access cash for emergencies.”

Challenge #3: Stay ahead of long-term care expenses
Clients need to be aware of the relationship between longevity and the possibility of facing a long-term care need. Planning ahead can help ease the emotional and financial impacts.

Conversation starter: “Planning ahead for long-term care funding may make the situation easier for your family to manage.  Should the need arise, you’ll want your family to know you’ve planned ahead financially. Whether that’s for a home healthcare worker or nursing home, you don’t expect them to shoulder the financial and emotional burden of care alone.” 

Challenge #4: Grow and protect clients’ retirement principal over time
Living longer leaves clients more exposed to experiencing dips in the market value of their equity portfolio when they may need funds the most. Adding to that is the possibility of taxes chipping away at their wealth over time. It becomes even more critical to protect and grow clients’ retirement principals.

Conversation starter: “During retirement, you’ll need to make sure you have enough money to live comfortably and keep up with inflation. That means thinking about ways to grow your retirement principal while protecting it from market swings and taxes.”

Educate and engage your clients
Share the checklist Living well longer  to help your clients address these longevity challenges.