The need for a framework like Confident Retirement stems from a number of studies, including some conducted by Ameriprise, that show a majority of Americans may be financially unprepared for retirement. (See “What is Derailing Boomer Retirement?”) Recent research revealed in an Ameriprise study, the Retirement Check-In survey, found that on average, Americans nearing retirement report a gap of nearly $200,000 between what they have saved for retirement and what they believe they will need to live comfortably in retirement. The same survey found that many Americans also were lacking in confidence about being able to cover the essential expenses in retirement, such as housing, food and taxes.
The Confident Retirement initiative pairs a strong framework with easy-to-use technology to help inspire an ongoing dialogue between clients and advisers. The process leads clients to an understanding of their retirement needs based on individual dreams and goals, and helps advisers determine how to utilize their assets in retirement to help them meet their expectations.
The Confident Retirement approach concentrates on four fundamental areas that advisers can address with clients to help them feel more confident about their retirement.
The four areas are: Covering Essentials, Ensuring a Lifestyle, Preparing for the Unexpected, and Leaving a Legacy. Each goal is addressed in a simple, structured way to assess and determine solutions that will help a client meet goals and needs. The four areas are addressed singly. Over time advisers and clients can track their progress and adjust their strategy as their financial situation changes. Advisers gain a deeper understanding of their clients, and clients become more engaged and involved in building the retirement they want.
Define Plans, Discuss Retirement Needs
“We’ve developed a way to help pre-retirees and retirees truly engage in an ongoing conversation about what and how they need to prepare for retirement,” said Kim Sharan, president of financial planning and wealth strategies at Ameriprise Financial. “Confident Retirement makes it possible for clients to define their retirement plans and get a clear understanding of how they will fund them. It also prompts clients and advisers to discuss potential retirement needs that they may not have yet considered.”
As more advisers begin using the Confident Retirement approach, said Pat O’Connell, executive vice president of the Ameriprise adviser group, the firm anticipates it will make a big impact on the level of confidence clients have about their retirement. “In uncertain economic times, having a simple yet detailed plan in place can make all the difference,” O’Connell said.
The Retirement Check-in survey was commissioned by Ameriprise Financial and conducted by telephone by Koski Research in November. Respondents included 1,000 employed Americans ages 50 to 70 with $100,000 or more in retirement funds and/or investable assets.
More information about the Confident Retirement approach is on the Ameriprise website.