Heard of the book "Who Moved My Cheese?" Probably. The title might reflect the anxiety clients have about retirement. Some might think they will need to work until they are carried out of the office feet first. Can you have a retirement planning conversation that reduces their level of anxiety? You probably can.

Long ago, In a galaxy far away…

Some people still remember defined benefit pension plans. Companies have gotten away from them, but the concept was you stayed with one employer a long time, became vested in the pension plan, retired and received monthly checks until they carried you off the golf course, feet first. We forget people didn't have that much money saved up back then. Taxes on earnings might have been higher too, making saving difficult.

And now for something completely different

Today companies downsize. People change employers far more often than their parents or grandparents did. Defined benefit plans have been replaced by defined contribution plans. Your retirement is in your hands now.

Most Americans are really unprepared for retirement. But assuming they realize the extent of the problem early, there are ways you can help.

Your client will likely have three sources of income in retirement. This is a good conversation to have with them.

1. Regular monthly income. Social Security is the most obvious example. They might have a defined benefit pension plan sending some money their way. A previous employer might have converted the company pension plan into an annuity.

This introduces annuities into the conversation. If your client really, really wants monthly income they can count on receiving, moving some assets into an annuity and letting it go though its accumulation phase for several years might be a good idea.

You've heard annuities described as personal pensions or private pensions. If they are anxious about "giving their money away" there are many different types of annuities for many situations.

Remind them that Social Security is a form of annuity. You pay into it for years. When you start to claim your benefits, you get a monthly check for the rest of your life. There's no "lump sum" option you can choose.

2. Investment assets. Some are tax-deferred, like a 401(k), others are outside assets such as bank CDs. These can generate a return or cash flow in retirement. Clients also have the option to downsize their home (assuming they own it) or relocate to a state with a lower cost of living. Many people like this idea, especially when they get their property tax bills.

Eventually downsizing frees up investment capital. You know money grows faster in a tax -deferred environment because the government isn't taking their cut along the way. (They'll get their chance.They are patient.) If your client is behind on their retirement plan contributions, can they make "catch up" contributions? This might help them tax-wise today.

3. Part-time income. Your client might not retire completely in the hammock, the Pina Colada way. They might instead take on a part-time job. This scares them every time they see a supermarket cashier older than them. But they might not need to choose that job. Some people retire and go to work in related fields. Police and retired military might transition into a full-time job in private security. Air Force pilots might become commercial pilots. Other professionals retire and consult in their field. People write and sell articles. They start businesses.

Get them thinking. If they start a business, they'll likely need a retirement plan. This "third leg of the stool" is more important as an income stream to fill the gap the other two streams might leave.

Talk with your clients about viewing retirement from a different point of view. It may help to reduce their anxiety. That's another way you add value.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, "Captivating the Wealthy Investor" can be found on Amazon.

READ MORE:

Instant Insights /

Telling clients what retirement might look like in the future

More From HR Executive

Related Stories

Recommended For You