Retirement Advisors: Don’t Let Your Clients Make These Devastating Mistakes

When you’re advising people about their retirement plans, you need to be very careful. Of course, that goes for people working with any type of client! But in this very specific field, you need to take care to avoid some very specific mistakes.

Here are some of the things you should definitely be advising them against. Remember: this article assumes that your clients probably haven’t reached retirement age yet. Much of this advice can be relevant to any client from the their twenties all the way up to their fifties! Of course, some of it is important to retirees, too.

Taking money from their retirement fund too early

Let’s say a client really needs some money. But they’ve got most of their funds locked up in their retirement account. The temptation, obviously, is to take the money from their. But you should probably advise your client to find other ways to get money. Whatever the retirement account type is – 401k, IRA, whatever – they will probably have to pay a hefty penalty. This isn’t to say that you should always suggest against it. They may, after all, be eligible for penalty-free early withdrawal.

Not making a will or a legacy plan

Strange but true: many people who have strong retirement plans often forget to deal with wills or legacy plans. Or, rather, they don’t forget so much as they simply feel they don’t need to do it just yet. After all, isn’t dealing successfully with one financial plan enough for the time being? You should try advising your client that a lack of a will or legacy plan is going to affect their retirement fund should something happen to them. If it all just goes to the government due to lack of planning, then it was all kind of a waste of time, right?

Leaving the way you do business a mystery

Actually, this is a mistake that you both need to avoid making! Let’s say your client isn’t that informed about how exactly you do your job. In this case, they might not be thinking independently enough about their finances. And, at the end of the day, any financial decisions they make is up to them. It’s better if they’re informed about your practices. Clue them in on the lingo you use. Explain to them. Show them the retirement planning software and methods you use to help them make their decisions.

Retiring too early

If your client has reached retirement age and is eager to retire, then they will probably ask for your advice on the matter. You need to be as blunt with them as possible. Look at their retirement goals and assess them against the funds your client has. They may now have saved up enough in their retirement fund. Of course, this is something that should have been highlighted at some point in the past. Strong planning will allow you to estimate at what age the required funds will have been accrued. If they try to retire before this time, advise them against it. Of course, you should also highlight to them the problems with working past retirement age.

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