Kemberley Washington

Are Your Clients Prepared for Retirement?

It is a brand new year and many of your clients are setting goals to secure their financial future. Take this opportunity to meet your clients and keep them on the right track.

January 17, 2012
by Kemberley Washington, CPA

Whether your clients are in their tender 20s or nifty 50s, it is never too early or late to begin building a nest egg. Determine where your clients are in their road to retirement and debunk the financial myths that your clients may have. Inquire about where they see themselves in retirement, understand where they are now and more importantly what it will take to get them where they need to go.

Listen to Your Clients

  • Do your clients see themselves when they reach retirement age? Sitting on the sandy beaches of Florida? Or working day to day until the good Lord calls them home. Review your client’s financial picture to determine which expenses can be eliminated in their retirement years to estimate the amount needed to fund a comfortable lifestyle during retirement. Are they comfortable cutting out housekeeping expenses to reach their financial goals to save a buck or two or do they envision a lifestyle without any financial interruptions?
  • Where are your clients now? Are they active in their current employer’s plan? If they are self-employed, have they considered establishing a retirement plan? Determine whether they are taking advantage of tax advantage accounts and/or employer matching contributions. These options can provide funding that would allow the client to reach their retirement goals faster.

    If your client is self-employed, review retirement plans that are available to them. Educate your client about the advantages and disadvantages of retirement plans available to self-employed individuals. Help them understand the contribution limits, annual reporting requirements, matching requirements and other key elements of each plan.
  • Are your clients able to sleep at night if their investment portfolio decreases sharply? Will they call you if the market goes for a roller coaster ride? Analyze your clients’ current holdings to see whether their current holdings are in line with their financial goals and risk tolerance. Careful planning can increase the probability of your clients reaching their financial goals in a timely way. Review their assets carefully. Some clients may say they want to avoid risky investments at all costs, but a careful review of their investment portfolio would say otherwise.

Understand Your Client

One size does not fit all. What may work for one of your clients may not necessarily work for the other. As their trusted adviser, it is your responsibility to let your clients know when they set lofty unrealistic goals. Stay positive and offer alternatives that would fit their lifestyle. Maybe one client is comfortable with working a part-time job during retirement, while another may consider downsizing during their golden years. As you meet your clients during busy season, take the opportunity to review their finances and help them get on the right financial and retirement planning track.

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Kemberley Washington, CPA, is an accounting instructor in the School of Business at Dillard University and has previously worked for the IRS as both an agent and investigator. Check her blog out at Kemberley.com.

* The AICPA’s Personal Financial Planning Section is the premier provider of information, tools, advocacy and guidance for CPAs who specialize in providing estate, tax, retirement, risk management and investment planning advice to individuals and closely held entities. The Personal Financial Planning Section is open to all Regular Members, Associate Members and Non-CPA Section Associate Members of the AICPA. If you are a CPA who wants to demonstrate your expertise in this subject matter, become a Personal Financial Specialist Credential holder. Visit www.aicpa.org/PFP to learn more.