Allworth CEO Scott Hanson shares essential steps everyone - but especially women - need to take when planning for retirement.
Like you, I appreciate a silver lining.
I’ve been advising long enough to have worked with some of my clients for almost 30 years.
With long, friendly relationships comes the reality of mortality.
Much has changed in our world over the last three decades. But what hasn’t, is that men still typically die first.1
While somber, the silver lining to this is when I meet—usually one-on-one for the first time—with the surviving half of a couple, and she leaves my office knowing that the plan they’d implemented and worked on has all been worthwhile.
Whether you’re partnered, male or female—and until the very real retirement income and preparation gap between men and women closes—it’s imperative that you understand everything you need to do.
Simply, whether female, male, married, divorced, widowed or single, either personally or by extension, the following applies to almost everyone.
I met with someone once whose husband had died unexpectedly a year before. She’d been trying to get in to see me, but it had been impossible for her until then.
Why a year?
Because that’s how long it took to figure out not only where all the money and investments were, but to gain complete access to them.
With passwords and poor communication, the firewall of secrecy the husband had built around their finances took a surprisingly long time to tear down.
While not as common as it was years ago, this incredibly tragic scenario still happens. The spouse that handles the finances dies suddenly, and the survivor has very little understanding of where the money is, how it’s invested, and even what to do once it’s accessed.
For everyone reading this, if you or your partner aren’t 100% sure where everything is, or, worse, doesn’t have ready access to it in case of an emergency, that needs to be rectified.
Typically, no one means for this to happen. But, I’m sorry to say, that the denial of the inevitability of death will be proven wrong 100% of the time.
When it comes to money, if there are black holes of communication between you and your partner, have an “exchange of information” sit down today. Then, follow that meeting up with the accountant and the advisor to erase any mystery and to make sure there are no surprises, secret passwords or safety deposit boxes with hard-to-find keys.
I once had a fascinating appointment with a couple that didn’t need me. (And I told them so.)
These two had a fantastic long and short-term investment strategy, they’d had years of maxing out both their retirement accounts, they were minor experts in Social Security, they had multiple streams of income, and they even had great healthcare and estate plans. All that, and not only had they done just about everything possible to prepare for their retirement together, they had an entirely separate retirement plan just for her.
Great savers obviously, these folks were not only prepared to fund at least a 25-year retirement for the two of them (with no drop off in income or lifestyle), anticipating that she might someday be alone, they’d gone the extra mile to save for her, in separate and unique investment vehicles, for an additional 10-years.
Should you wait? Should you apply early? Should one spouse apply and the other wait?
There are 81 unique ways for couples to approach and apply for Social Security.
Based on income, savings, and health, the best time to apply is not only unique for everyone, but it can be worth thousands, even tens of thousands of dollars in extra income over the course of your retirement.
Remember, especially when it comes to Baby Boomer couples, the woman is typically the one with the lower benefit. This means getting educated about your options and making the right choices about Social Security the first time.
Whether married, partnered or single, no matter what stage of the retirement (or retirement preparation) cycle you are in, if you haven’t been, you need to be proactive. Due to averaging more time away from the workforce (which means less Social Security and lower retirement savings), pay gaps, more healthcare expenses, longer lifespans, or merely because you allow your partner to make the big financial decisions, women need to plan for longer retirements.
If you’re partnered and in the dark about anything related to retirement or investing, talk to your spouse about changing the process so that you either know your needs will be met, or you can make the necessary adjustments right now to see this process through.
I don’t like being the bearer of gloom. I like stories with silver linings. But time is typically not on our side. Putting off planning and organizing is a common mistake that I’ve seen countless people come to regret.
Take care of it now, and later, almost no matter what happens, you can look back and be glad you did.
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1The NBRI Circle of Excellence Award is bestowed upon NBRI clients meeting one or both of the following criteria: Total Company score at or above the 75th percentile of the NBRI ClearPath Benchmarking Database and/or improvement of five (5) or more benchmarking percentiles in Total Company score over the previous survey.
2Scott Hanson (2011, 2012, 2013, 2014, 2015 & 2016) and Pat McClain (2012, 2013, 2014, 2015 & 2016). Barron's© magazine is a trademark of Dow Jones L.P. The ranking reflects the volume of assets overseen by the advisors and their teams, revenues generated for the firms and the quality of the advisors' practices.
3As of 01/20, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $8 billion in total assets under management and administration.
4Barron’s 2019 Top 50 RIA Firms. Barron's© magazine is a trademark of Dow Jones L.P. The ranking reflects the volume of assets overseen by the advisors and their teams, revenues generated for the firms and the quality of the advisors' practices.
✢Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.
✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.
†Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.