2-minute article

Financial literacy for your clients in their 40s and 50s

As your clients enter their 40s and 50s, they may be shifting their priorities toward family life and retirement planning. They may also find themselves sandwiched between the care and financial needs of their children and their aging parents. Many clients will be in their peak earning years, so showing them how to maximize that incoming wealth will be important in helping them meet their goals and needs.

There are many new opportunities to talk about financial literacy and confirm that they understand the basics as they relate specifically to this time in their lives. Here are four things your clients in their 40s and 50s should consider.

  1. Education funding and costs
    For clients with young children, starting a conversation early about the costs of education will give them time to save. According to Sallie Mae’s How America Pays for College report, families paid an average of $30,017 for higher education over the 2019-2020 school year. With high costs ahead, you may want to confirm that parents know about 529 savings plans and the option of using an annuity to help pay for college depending upon their age and time horizon.
  2. Re-evaluating goals based on time horizon
    If plans were made in your clients’ 20s and 30s, they may be outdated due to changing income streams or financial needs. Revisiting their long- and short-term savings goals will help your clients understand how their current savings habits may affect their retirement. It can also reveal shortfalls that can be addressed starting at age 50 with catch-up contributions to retirement accounts.
  3. Retirement budgeting and income streams
    While many of your clients are saving money in 401(k)s, IRAs and annuities, they may need help seeing exactly how those streams will come together in retirement — especially around required minimum distributions (RMDs) and possible taxes. Making a full chart of accounts, from Social Security to drawdowns from managed money accounts, will help your clients see how everything they are saving for will come together.
  4. Legacy planning
    Clients in their 40s and 50s may be starting to think about their legacies. As their financial professional, help make sure they understand the essentials of end-of-life planning. Help them clarify the roles that beneficiaries, wills and trusts can play in their estate plans.

Helping your clients see the importance of taking a proactive approach to planning for the future can help them make sound financial decisions now that have a lasting effect. As your clients enter their 40s and 50s, you have the opportunity to help boost their financial literacy and give them the tools they need to help achieve their goals and create an income stream they can count on for many years to come.

Two things you can do today

  1. Review your book of business and make appointments with clients in their 40s and 50s who have children or who’ve had a recent change in life to help assess their changing needs.
  2. Refresh your knowledge of catch-up contributions.

This information is brought to you by Athene — where unconventional thinking brings innovative annuity solutions to help make your retirement dreams a reality.