Retirement planing is fast evolving. Longevity keeps increasing.
Medical spending keeps rising. And market conditions — notably record-low interest rates — are complicating retirement outlooks.
Add to that the U.S. Census projecting that the number of Americans who are 65 and over will nearly double over the next three decades.
There will be a projected 88 million Americans reaching that milestone by 2050, up from 48 million.
That could translate into significant business opportunities in years to come for financial planners recommending clients consider delaying their retirement by continuing to work in their present career, or getting a new job. Working past traditional retirement age is already on the minds of many clients. A 2015 AARP study finds 37% of Americans expect to continue working after they formally retire from their current careers.
“A year or two of extra working can make a huge difference,” says Tim Steffen, director of financial planning at Baird in this month’s feature story. “It’s an extra year of saving. It’s an extra year of not spending. You’re compounding Social Security benefits.”
So how does an adviser persuade the client to go for a second act and like it?
It’s not just talking up the benefits of working longer to clients who originally thought they would retire in their early to mid-60s.
“I say to clients, let’s get into a creative space,” says RBC adviser Darla Kashian. “That may not bring in the six-figure income you are accustomed to, but it may give you other things. Does it give you health insurance? Does it give you an opportunity to travel? To work in a nonprofit? It doesn’t necessarily have to be a punitive thing.”
With the promise of growth in the aging population, advisers need only look to the AARP for inspiration. The organization’s website has information on extending careers, for example, serving in the military past 50, as well as exploring new ones, including going from engineer to teacher.