In Focus: When Clients' Plans Change  

How to deal with someone close to retirement whose plans have changed

  • Describe some of the challenges of managing clients close to retirement
  • Identify ways of dealing with some of these questions
  • Describe some of the ways of preparing for upsetting life events
How to deal with someone close to retirement whose plans have changed
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For many of us planning for retirement, the focus is on saving over the long term.

But the past 18 months have shown us how events outside of our control can force us to rethink our longstanding plans, with many people reaching the end of their working life reassessing their plans entirely.

Research conducted by Interactive Investor shows that one in five people aged 60-65 believe they will need to delay their retirement due to the pandemic, while one in four fear they will never be able to retire. 

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By understanding each client’s unique situation, supporting them through periods of vulnerability and building their financial resilience, advisers can ensure that their clients can enjoy the retirement they had always planned for. 

Setting the client’s retirement plan 

For many, retiring from work is something to look forward to, with more time to travel, see friends and family, and enjoy hobbies. In ideal circumstances, the adviser works with the client to plan their investments so that they have the right pot of money when they retire and can keep generating returns needed to see them through their retirement. 

To help the client enjoy financial security throughout retirement, a robust cash flow plan is also vital. Cash flow planning not only equips clients with the discipline and skills needed to plan for their finances in the future, but prepares them for periods of adversity, too. 

Holding discussions on what the client must spend their money on, would like to spend their money on and how they dream of spending their money can reduce the investor’s negative associations with “budgeting” and increase their motivation to manage their own finances.

What’s more, when goals are broken down into smaller achievable targets, clients are provided with realistic aims that they can work towards. As they make progress, they obtain a sense of achievement, which boosts their confidence when facing future financial tasks. 

A well-made investment and cash flow plan factors in risk and the possibility of the unexpected. However, events such as COVID-19 show that even the best-laid plans may need to change. 

Dealing with a change in circumstances 

The pandemic has forced many to reassess their retirement plans. In 2021, around 680,000 Britons will reach state pension age, according to the Office for National Statistics, but COVID-19 means many are having to think again about when, or even if, they can stop work. 

For a large number of people, the pandemic has altered their circumstances for the worst, with 1.45m planning to delay their retirement by more than three years on average.

Of these, many have lost their jobs at a crucial life stage and may be facing difficulties returning to employment following redundancy.

According to analysis by Rest Less, unemployment levels among those aged 50-64 increased by 55 per cent in the last three months of 2020 compared with the same period the previous year.