What I’m Telling My Clients about Peak 65

We’re halfway through 2024. Are your retiring boomer clients prepared to protect their wealth?

It is hard to believe we are more than 6 months into Peak 65, where the largest cohort of Boomers turn 65 years of age. Currently, over half of Americans aged 61 to 65 are already retired and have filed for Social Security, and over a quarter of these retirees are financially supporting adult children and extended family members, according to the Alliance for Lifetime Income. Furthermore, the National Center on Aging reports more than 17 million Americans aged 65 years or older are financially insecure. For the above reasons, it is crucial we ensure they are in the best financial position possible as they enter retirement.

Key Takeaways

• Over 50% of Americans aged 61-65 are retired, and many support extended family, stressing the need for thorough financial planning.
• Retirement requires strategies for different stages: “Go Go” (early years), “Slow Go” (mid-retirement), and “No Go” (later years).
• Retirement plans must be adaptable to unexpected changes like health issues or tax laws, ensuring long-term financial stability.
•  Financial advisors enhance client confidence through ongoing education, emotional support, and updates on relevant changes.

As clients explore retirement dates, I help them complete a pre-retirement checklist to anticipate potential near-term and long-term expenses, financial hurdles, and unforeseen healthcare expenses they may encounter in retirement.

The “Go Go” years, also known as the early years of retirement, is a great time to assist two-income households with reducing their living expenses down to one income if possible. This also includes optimizing Social Security and ensuring that funds and protections are available without paying extra taxes and taking unnecessary distributions to keep the client’s financial plan intact.

During the second decade of retirement, better known as the “Slow Go” years, clients often value quality time with family and friends. This may also involve making different living arrangements, including selling real estate. Helping them explore options in advance will help better position assets for disposal, transfer, and/or acquisition to maintain income and preserve assets where possible.

Tip

Exploring different options for changes in living arrangements can help optimize asset management to maintain income and preserve wealth.

Clients ideally age in place during the “No Go Years,” and long-term care is a crucial consideration. Ensuring that estate plans are adequately updated is always essential but even more significant in this phase of retirement because clients risk experiencing diminished mental capacity. Having family planning meetings to prepare beneficiaries for the transfer of wealth, understanding the beneficiaries’ goals for their inheritance, and ensuring they understand the tax implications, if any, for their inheritance is essential.

What I’m Telling My Clients

The phases of retirement require an active financial plan, similar to a GPS. We must keep it updated to recalibrate for unexpected events like home repairs, health issues, death, tax law changes, and inflation, ensuring efficient navigation through retirement without running out of resources.

The Bottom Line

Considering the recent economic statistics surrounding Boomers, we as financial advisors can help to build their financial confidence by providing ongoing education and emotional support, staying abreast of relevant legislative changes, and helping them navigate the complexities of retirement to ensure they are prepared. Every client leaves a legacy, whether they have heirs or not. Knowing their wishes ensures that their final affairs are settled according to their desires, reflecting the legacy they built.

Read the original article on Investopedia.