Working effectively with the nation’s nearly 80 million baby boomers, whether retired or contemplating retirement, was a major focus of the Raymond James 15th Annual Women’s Symposium, sponsored by the firm’s Network for Women Financial Advisors.

Attended by more than 100 leading women financial advisors from across the country, the conference took place at the Renaissance Vinoy Resort & Golf Club in St. Petersburg, Florida, from Wednesday, September 30, to Friday, October 2.

Several sessions focused specifically on issues related to the nation’s aging demographic and ranged from managing the estimated $7 trillion in IRA rollovers expected by 2012 to health care costs—topics that are often an integral part of advisors’ regular reviews with clients. Including a health care professional in the discussion can take client relationships “to the next level” and help ensure that challenges, such as longer lifespans, are adequately addressed, noted Marci Sadorf, R.N., and director of services for New Jersey-based Bayshore Health Services..

Rising Health Care Costs

U.S. women, who today have a life expectancy of about 85, typically outlive their male partners, noted Renee Larson, product manager with Raymond James’ insurance affiliate, Planning Corporation of America.

Although many may have taken care of ailing family members in the past, they likely will have to go beyond family members for support and will almost certainly find high-quality health care increasingly rare and expensive, she added. “Fewer people are providing it, which means that costs will soar.”  Making the situation even more difficult, many investors in or near retirement have not recovered from the losses they took in 2008.                            

“Fewer Americans are in a position—financially, physically or geographically—to care for older family members on a continuous basis,” Larson said. “Moreover, they may not be aware of the available options, from at-home care to assisted-living communities and nursing homes.”

While at-home care may often be the most affordable, it is not always appropriate, she cautioned. “Forty-three percent of people aged 65 will spend time in a nursing home, and seven out of 10 couples over age 65 will have at least one partner using nursing-home care.”

Although long-term care coverage is a good option for eligible individuals who can afford the cost, life insurance with a long-term care rider may be the only practical choice for those with pre-existing medical conditions, even though the coverage offered is typically not as comprehensive.

Exit Strategy

Of course,  the rising cost of health care is just one issue clients in or approaching retirement must consider. Others include changes in tax law that may affect them or their estate, whether they can spare assets to transfer to the next generation and, even more fundamentally, whether they are at risk of outliving or losing control of their assets, said attorney Jennifer Gugliotti, field director with John Hancock Financial Services. 

To help ensure clients have an “exit strategy” to optimally employ the funds they have spent a lifetime accumulating, Gugliotti suggested advisors conduct “beneficiary audits.” These reviews, especially important for those whose marital status or family situation has changed, can help ensure that clients’ funds are deployed appropriately. They also provide an incentive for clients to bring in their other accounts for review and analysis—helping to ensure that the accounts are set up appropriately and providing advisors with a more comprehensive look at their total financial pictures.

Advisors also should take a close look at “antiquated” retirement plans, such as Keogh, money-purchase or profit-sharing plans, she added. By age 59½, she said, clients usually should be mapping out their exit strategies—determining, for example, whether they should roll over their employer-sponsored plan directly into a Roth or go first to a conventional IRA.

In addition, once clients have retired, they may need to start taking withdrawals, perhaps as early as age 59½. Their advisors need to help them consolidate retirement assets, recommend an appropriate allocation mix and determine the feasibility and desirability of withdrawing funds at that point, Gugliotti noted.

Clients who are still working may be able to take “in-service” withdrawals and roll the proceeds into variable annuities with guaranteed minimum withdrawal benefits (GMWBs) wrapped in IRAs, she added.

Cutting Back

At age 70½, clients must start spending down. Part of the advisor’s job then becomes helping them to do so wisely—minimizing taxes and risk while taking required minimum distributions and, if necessary, other withdrawals.

If Gugliotti’s estimate that some 76% of baby boomers have no distribution plans for retirement is on target, advisors who truly understand their clients’ needs—as well as the ups and downs of qualified retirement plans—can expect their practices to flourish in years to come.

Karen M. Schultz is director of the Raymond James Network for Women Financial Advisors.