Often an advisor’s job is to tell clients an unpleasant truth.
For instance, a client is a decade or less from retirement and insists he or she should retire at age 62, but lacks sufficient resources.
What should an advisor do?
“I’ve had clients who had the retirement bug and I had to tread very carefully with them. Sometimes clients come back several times and they want to be told they can retire but they can’t,” says Charles Hughes, a veteran CFP in Bay Shore, New York.
Today the problem for millions of Americans is their retirement saving goal seems out of reach, sometimes far out of reach.
“The majority of Americans have less than $30,000 saved, and a third of Americans have nothing at all,” writes economist Teresa Ghilarducci in How to Retire with Enough Money and How to Know What Enough Is.
“It is an enormous shortfall,” she writes.
This is a problem that confronts many advisors, yet one piece of solving the puzzle may be simple: Just don’t do it. Put it off for a while, which is not the kind of advice many longtime clients want to hear.
Chris Costello, a CFP in Leawood, Kan., detests having to make the delayed retirement recommendation. This is in part because his father died in his early sixties and he wasn’t able to enjoy a good retirement. Nevertheless, Costello concedes that sometimes the best retirement planning advice is wait until next year to retire or possibly the year after that. Then retirement goals can often be reached.
“This extra work can have the dual effect of giving you more time to fund retirement accounts and, to put it bluntly, it shortens the amount of time your retirement savings need to carry you,” he adds.