Client Service October 6, 2016

Running Out of Money is Biggest Concern of CPA Financial Planners’ Clients

It is no wonder, since Baby Boomers are retiring with an average of only $104,000 in savings.
Reported by

Forty-one percent of CPA financial planners say that their clients’ biggest concern is running out of money in retirement, according to a survey by the American Institute of Certified Public Accountants’ (AICPA) Personal Financial Planning Section (PFS). This survey of 500 CPA financial planners found that their clients’ second biggest concern is maintaining their current lifestyle, cited by 29%, followed by rising health care costs, which 11% of CPA financial planners say is weighing on their clients’ minds.

The Baby Boomers currently retiring are doing so at age 62, with an average nest egg of $104,000, according to the AICPA.

“Since people are living longer, not having enough money in retirement is a legitimate concern, and financial planners should have those difficult conversations with clients about planning for unexpected events and curbing spending, if necessary,” says Susan Tillery, chair of the AICPA’s PFS Credential Committee. “Developing a comprehensive financial plan, which is flexible and includes tax strategies to increase income in retirement, can address many financial worries confronting retirees.”

The survey also found that during clients’ first 10 years of retirement, their biggest fears were a sharp decline in the value of their investments (52%), followed by serious illness, including dementia and/or diminished capacity (24%) and helping their children or grandchildren (11%).

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

After 10 years of retirement, 44% of clients become worried about serious illness, followed by a sharp decline in the value of their investments (28%) and the possibility of having to move into an assisted care facility (19%).

“It is understandable that clients are increasingly worried about the financial implications of their health as they age,” Tillery says. “CPA financial planners can help alleviate these concerns by having frank discussions with their clients and addressing their financial fears.”

Client Service October 6, 2016

Investors Want Financial Planning to Include Health Care Costs

They also believe their financial future is largely dependent on their physical well-being.
Reported by

Eighty-one percent of Americans believe it would be very or extremely valuable for their financial adviser to include health care costs in their retirement planning, according to research by Transamerica and Luntz Global Partners.

When asked what is the most essential for their financial future, 37% said their health, followed by happiness (19%), security (19%), peace of mind (16%) and independence (9%).

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

“Being aware that health is of paramount importance to clients in building their financial security, advisers should use that knowledge to suggest solutions that take into account the full scope of their essential long-term needs,” says Dave Paulsen, chief sales officer at Transamerica. “It’s clear that better conversations result in healthier and stronger relationships between advisers and clients when discussing their finances and financial future.”

The research is based on a survey of 1,000 adults and focus groups held throughout the country, which required the participants to have a minimum household income of $75,000 and investable assets of $50,000 or more.

Transamerica has developed a micro site to help advisers approach clients’ financial wellness holistically: “How to Effectively Engage Clients.”

A recent survey by Edward Jones found that 60% of Americans are worried about paying for health care costs in retirement. Fidelity projects that a couple retiring this year will need $260,000 to pay for their health care costs throughout their retirement, a 6% increase from 2015.

«