Feeling financially secure is good. Being financially secure is better.

There was some good news in the 2013 Retirement Confidence Survey1 by the Employee Benefits Research Institute : 51% of respondents feel confident that they have enough money for a comfortable retirement. However, that headline statistic masks two concerning pieces of information. One is the “conflicted confidence” investors actually exhibit in the survey responses, as outlined by my colleague Rod Greenshields a few months ago on this blog.

The other is that it still leaves 49% of investors who say they are not confident that they have enough money for a comfortable retirement.

It’s clear that the retirement conversation needs to happen – and that it needs to change so that investors can rely on concrete facts, not feelings, about their financial security . Because at the end of the day, you can either afford your desired retirement lifestyle – or you can’t.

In our view at Russell, advisors are critical in this process of helping investors become engaged in their own future. Engaged so that they appreciate that living a desired retirement lifestyle requires more than a commitment to a dream. It requires a nest egg that has been diligently built and tracked over time, as well as an intelligent approach to drawing down that nest egg in retirement.

So, what are some steps you can take to help get clients engaged in viewing their financial-security-as-fact? In our view, there are four key steps:

  1. Help clients identify their important numbers
    Certain numbers and concepts matter in life – and gain importance with age. The earlier you can help clients identify the numbers that can impact their retirement plans, the more options they’re likely to have later in life.
  2. Help clients assess their current financial wellness
    Help clients get a more precise picture of where their nest egg stands today relative to the dreams they have for the future.
  3. Help clients pinpoint decisions they can commit to now
    It’s easy to think that you can change behaviors in the future. But changing today can have a bigger impact. Help clients determine which changes they can make today that have the potential to put them in a better place when it really matters most.
  4. Help clients commit to ongoing financial check-ups
    Engagement in retirement planning isn’t a one-and-done initiative. Help your clients create an ongoing check-up routine. A bit like the routine of daily teeth brushing and regular dentist visits.

We’ll cover each of these four activities over the next year in our quarterly Investor newsletter and this blog, starting with the first step.

Step 1: Helping clients identify their important numbers

Some numbers matter more than others when planning for a fulfilling retirement. The most recent edition of Investor includes some ideas that can serve as a starting point for your conversations with clients – whether they’re building their wealth, preserving their wealth just before retirement, or are already in retirement.

Building, preserving, or spending wealth chart

Consider sending the newsletter to your clients in advance of your next meeting to give them time to think about these questions and be engaged in the process. When you meet, discuss the implications of each number for their overall retirement readiness. By doing so, you can help clients feel more in control of their plan for the future.

The bottom line

Retirement planning is understandably overwhelming to many clients. Helping them break it down into more manageable, repeatable steps is one way to help increase their engagement in the process.

Get started by using the latest edition of the Investor newsletter to help clients identify their important numbers.

1 2013 Retirement Confidence Survey, Employee Benefits Research Institute.
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