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by Michael Lynch on Jun 22, 2018 9:00:00 AM

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How to Prescribe a Happier Retirement for Your Clients

Advisors who understand healthcare and its costs can help their clients have peace of mind for the future and position themselves as valued resources.

How to Prescribe a Happier Retirement for Your Clients By Mike Lynch


Longevity and evolving expectations present a new set of challenges for today’s financial advisor. Clients rely on financial advisors to help ensure their money stretches further to cover the costs associated with living longer, while advisors constantly need to find new and unique ways to reach and engage clients.


To meet both their own and their aging clients’ needs, advisors should consider expanding their knowledge of, and experience with healthcare. It would be unrealistic to expect advisors to have an extensive mastery of healthcare; however, taking the time to understand the basics of healthcare, as well as offer legitimate recommendations, could be beneficial to both the client and the advisor.

happy retirement

The Price of Longevity

Although investors may be planning for a 10- or 15-year retirement, a higher life expectancy means that retirement has the potential to last for 20 or 30 years. The financial implications of a longer retirement can be significant when accounting for just the basic cost of living, and the expenses become more substantial when factoring in healthcare needs. Many aging individuals already have recurring medical expenses; so, living longer means paying for those costs for a longer period of time. Additionally, chances are that as we age, we will develop new or worsening medical conditions that may require expensive treatment, such as surgery, hospital stays, medications, home modifications or hands-on caregiving.


While it’s impossible to predict the unknown and healthcare needs are unique to each individual, advisors need to inform their clients about healthcare-related challenges that may accompany longevity. There could be many unexpected expenses, and this potential lack of awareness presents an opportunity for advisors to demonstrate real value to their clients.

Advisors don’t need to know the answer to every healthcare question, but being able to explain the monetary impact that healthcare can have on their clients’ retirement is not only necessary to help clients maintain their quality of life for however long retirement lasts, but is also the perfect chance to gain their attention and, more importantly, their trust.


Building a healthy advisor-client relationship

To broach the healthcare topic, advisors could start by offering to meet with clients for a discussion solely focused on health. The objective of the conversation is to help the advisor understand the client’s current health and their particular risks, so that the advisor has a better sense of any potential healthcare costs a client might incur, so they can then discuss the possible financial impact of those specific health risks.


Clients may be hesitant to discuss their health with their advisor; in order to mitigate that concern, the advisor should explain the benefit these conversations can have on financial strategizing as well as emphasize confidentiality. Making the client feel comfortable and earning his trust will be paramount for effective conversations.


Another proactive step advisors can take is to form partnerships with healthcare professionals. Developing relationships with experts such as Medicaid or Medicare insurers, specialists, doctors, nursing home professionals or even a nutritionist or physical trainer can help advisors understand different aspects of healthcare, and therefore allow them to take a more holistic approach to financial wellness. Additionally, establishing this network enables the advisor to recommend healthcare professionals to their clients when the need arises, again working to gain their trust and offering a service that extends beyond traditional financial advice.


Advisors who want to go one step further could develop a health and wellness program for their clients. As part of this program, the advisor could host interactive events related to healthy eating, beneficial exercise for seniors or understanding Medicare/Medicaid.


These types of events can help aging clients learn how to better care for their health, and can also give them the opportunity to build relationships and a support system with other retirement-aged people. While these events may seem out of the box for a financial advisor, they are a great opportunity to go above and beyond to help clients prepare for their future.

Financial advisors don’t need to be doctors, but they do need to understand why preparing for medical costs in retirement should be an increasingly significant part of financial planning.

Extended longevity almost guarantees retirees will suffer from a few medical issues, and it also presents the possibility of outliving savings. Financial advisors who have a general

understanding of healthcare and its costs, and can offer real, actionable guidance have a unique opportunity to not only help clients and their families have peace of mind for the future, but also to position themselves as a valued resource to clients.


Michael Lynch is Managing Director, Strategic Markets, Hartford Funds.


This article appeared in Advisor Today. 


Topics: Retirement Planning