The arrival of spring brings feelings of renewal and a time to refresh priorities. It’s also a great time for getting one’s house in order, hence the phrase “spring cleaning.” And a recent blog post from Nationwide notes that now is a great time for financial advisors to apply the concept of spring cleaning with their clients’ finances.
Once clients have their basic finances in order, advisors should “talk to them about their plans on saving for retirement,” according to the blog. And while some of these options may seem basic, spring is the perfect time to revisit some of these core points.
One of the easiest ways clients can start saving for retirement is to enroll in their employer’s 401(k) plan. Many employers offer dollar-for-dollar matches up to a certain percentage with this type of plan. And since contributions to traditional 401(k)s are tax-deferred, they aren’t taxed on the money until they’re withdrawn. And by then, the retiree could be in a lower tax bracket.
Nationwide’s paycheck impact tool can show how this can affect clients. Financial advisors should also be prepared for conversations with clients looking to leave their job and are curious how that impacts their 401(k) or retirement plans.
Nationwide also recommends using a Health Savings Account. HSAs can help clients save for healthcare in retirement. And in addition to providing potential tax benefits, HSAs can also reduce the need to use personal savings on health care costs in retirement.
Clients may also want to consider planning for Social Security now, so they can incorporate it into their overall retirement plan. Nationwide’s Social Security 360 Analyzer® allows advisors to employ different scenarios to help with Social Security planning.
Nationwide’s advisor advocate editorial team also advocates that clients diversify their retirement income sources. “It is likely your clients will not rely solely on Social Security income in retirement and will want to consider a diverse portfolio of retirement income, such as their 401(k), Roth IRA, or a variety of other investment opportunities,” according to Nationwide. “Since market conditions change over time, their investments can have varying degrees of return. By diversifying their retirement income sources, you can help your clients limit their financial risk and be better set up for retirement.”
Once advisors have discussed retirement and investing options with their clients, the next step may be to discuss estate planning opportunities. “Legacy planning is extremely important and gives you another opportunity to demonstrate empathy and win your client’s trust,” the advisor advocate editorial team at Nationwide writes. “It is never too early to start talking about your client’s legacy plan, and how they are going to pass on their wealth to their beneficiaries. This also allows you to work with their families and build additional relationships there.”
Nationwide offers a variety of actively managed ETFs for advisors that cater to a range of investment exposures and strategies for those seeking retirement income options for their clients as part of their bigger retirement planning pictures.
For more news, information, and strategy, visit the Retirement Income Channel.