Your clients may see their retirement as the culmination of a lifetime of hard work. After decades of saving and planning for the future, they can finally enjoy the fruits of their labour when they stop working.
They might decide to travel the world, spend more time with family, or take up new hobbies. Yet, it’s important that they feel confident they can fund this lifestyle, and a recent survey shows that may not necessarily be the case.
According to Professional Adviser, 49% of those surveyed said they were uncomfortable with their current level of retirement savings. Additionally, 38% believed they would not reach their goals in retirement.
When asked what they thought could correct this dissatisfaction with their retirement savings:
- 50% said a job with a higher salary
- 19% said an inheritance payment
- 12% said an increase in employer pension contributions.
In most cases, respondents believed that a lack of funds was the primary reason for the shortfall in their retirement savings.
However, only 10% of people recognised that better financial planning could be the most effective way to reach their goals.
If your clients are unhappy with their savings and are concerned that they will be unable to fund their lifestyle in retirement, they might also be overlooking the value of financial planning.
Fortunately, with the right support, they may be able to improve their retirement plan and ensure that they can fund their desired lifestyle.
Read on to learn how a financial planner can help clients who are dissatisfied with their retirement savings.
A financial planner can help clients understand their goals
If your clients have not worked with a financial planner before, they may not have a clear idea of their retirement goals.
As a result, their measure of whether they have enough saved for retirement may be based on an arbitrary number, rather than a personal target based on their unique wants and needs.
A financial planner can help your clients think about their aims and priorities in later life. They can then discuss what level of income they need to generate to achieve this lifestyle.
In some cases, your clients might find that they are in a better position than they first thought. Alternatively, they may indeed have a shortfall in their retirement savings.
Either way, having a better understanding of their goals may allow them to plan more effectively as they have a clear savings target.
Cashflow forecasts show clients their financial future
Once clients have set a savings goal, a financial planner can use advanced software to create cashflow forecasts that give them a picture of their financial future.
They can draw useful insights from visual forecasts built on information about your client’s earnings, savings, and pensions, as well as their expenses. Cashflow forecasts also account for expected investment growth and inflation.
The results from this cashflow plan can give an indication of how much your clients need to contribute to their pensions and other savings and investments to meet their goals. Cashflow planning can also be used to model various scenarios to see how they might affect your clients’ financial plan.
Armed with this knowledge, your clients could adjust any aspect of their wealth, be it pension contributions or investment strategy, to ensure that their retirement savings are on track.
Consequently, they may be far more satisfied with their savings because they are confident that they can achieve their dream retirement.
A financial planner can help clients overcome potential challenges
There are several factors that could affect the value of clients’ wealth. For instance, we are currently experiencing a period of high inflation, and this could reduce the spending power of their wealth.
Additionally, poor investment performance could cause your clients to worry about their wealth and whether they are still able to meet their financial goals.
These hurdles can erode your clients’ confidence in their retirement savings, leaving them dissatisfied with their current position.
Fortunately, a financial planner can help them overcome these hurdles and tweak their financial plan, so their retirement savings remain on track. They also offer valuable reassurance during times of turmoil.
Working with a financial planner builds retirement confidence
Overall, working with a financial planner to set goals, create detailed forecasts of their finances, and overcome hurdles can help your clients build retirement confidence.
Indeed, research reported by Professional Adviser revealed that engaging with a financial planner significantly improves confidence.
It found that 51% of UK adults aged 50 and over had a detailed financial plan, and these individuals reported an average retirement confidence score of 8.1 out of 10.
Conversely, those who didn’t have a detailed financial plan only had an average score of 4.6 out of 10.
This confidence and peace of mind can be incredibly valuable, especially during a period of volatility when your clients may feel apprehensive about their retirement plan.
Get in touch
If your clients are dissatisfied with their retirement savings, we can give them the support they need.
They can contact us at hello@ardentuk.com or call 01904 655 330. As an award-winning financial advice company that was a 2023 VouchedFor Top Rated firm, you can be sure that we’re a bona fide company providing excellent advice and high-quality service.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.
The Financial Conduct Authority does not regulate cashflow planning.
