How to Prepare Clients for Retirement as a Financial Advisor

For many clients, retirement is a goal that can feel far away, until one day, it’s right around the corner. Preparing clients for retirement means addressing their financial concerns, as well as their mental and emotional readiness. How you approach your planning and preparation strategy depends on how close (or far away) your clients are to their retirement window.

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Preparing Clients for Retirement: A Countdown for Advisors

As clients get closer to their desired retirement date, the planning process often shifts from a broader strategy to more detailed implementation. The conversations you’ve had over the years about savings rates, risk tolerance and long-term goals begin to crystallize into concrete timelines and action items. This is where structure becomes critical. Developing a clear, staged timeline helps set expectations, reduce uncertainty and create a shared roadmap that helps prepare clients for retirement with confidence.

A formal retirement countdown also allows you to raise issues that clients may not consider on their own, such as tax-efficient withdrawal sequencing, coordinating benefits between spouses or preparing for Medicare’s income-related premium surcharges. It also creates opportunities to benchmark their progress, stress test their plan against potential risks, and reinforce the importance of any final decisions they may need to make.

By anchoring your planning around specific time intervals – five years, one year and one month – you can streamline your advisory process while giving clients a sense of structure during a transition that can sometimes feel overwhelming.

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5 Years Until Retirement

The five years before a client retires is when the focus shifts toward helping them finalize their vision for retirement. You can help them prepare by initiating conversations about:

Where they plan to live
What a typical day in their retired life might look like
How they want to spend their time (traveling, picking up new hobbies, volunteering, etc.)
What concerns or fears they have about leaving work behind
Whether they anticipate any major life changes

These discussions give you a framework to use that can help you assess their financial plan. You can then create a list of areas that may need to be addressed, in order of priority.

For instance, you may need to discuss how to prioritize paying off any non-mortgage debt a client might have against taking advantage of catch-up contributions in their 401(k) or IRA. Or you may need to focus on diversification to manage risk and minimize tax liability, based on the client’s desired drawdown strategy.

The five-year mark is also a suitable time to consider contingency planning. For instance, you may want to discuss long-term care planning needs or how a client’s retirement may be affected if they have to assume caregiving responsibilities for a grandchild. And while it may be unpleasant, couples should consider the possibility of one spouse dying sooner than expected.

Ideally, the hope is that they will never need their contingency plan, but it’s there in case the unexpected happens.

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1 Year Until Retirement

An advisor working on a retirement plan.

As a client enters the final 12 months until retirement, they may experience a greater sense of urgency to ensure their plan is sufficient. If you haven’t worked with your clients to create an estimated retirement budget yet, now’s the time to do so. You can then encourage them to use the final year until retirement as a test run to gauge how well that budget works (or doesn’t work) for them.

You may also want to use this year to do some financial housekeeping to ensure that your clients have a clear picture of their assets, debt and net worth. For instance, if they have some old 401(k) plans at former employers, you can talk to them about whether it makes sense to consolidate them into a single rollover account.

Key discussions during this time may center on when to take Social Security benefits, retirement account withdrawal strategies and health insurance needs if a client is retiring well before their Medicare eligibility kicks in. You may also offer to review their estate plan to ensure they have the proper tools in place, which may include life insurance policies, a will and a trust.

1 Month Until Retirement

With retirement fast approaching, most major retirement planning tasks should be complete. At this stage, your client may need help with things like reviewing their pension benefit payout schedule (if they have one), or understanding any fees they may be expected to pay if they’re leaving their 401(k) with their employer when they retire.

Your client might also have questions about how you’ll continue to help them manage their financial plan if they’re no longer working. That’s a chance to discuss what they think they’ll need most from you going forward.

Finally, clients may simply be looking for some reassurance that they’ve done enough to prepare for retirement. You may need to spend some time going over their plan with them again in detail so they can look forward to their retirement date with confidence.

How to Prepare Clients for Your Retirement as a Financial Advisor

You might love what you do, but eventually, you’ll want to take a step back. While you may have spent your career helping clients prepare for their retirement, you’ll also need to do some planning to get them ready for your exit.

Typically, advisors should start thinking about succession planning when they’re 10 years out from retirement. A decade is usually long enough to decide what you want to happen to your business, choose a successor or find a buyer, and prepare your clients for the transition.

That part of succession planning involves having transparent conversations about what direction the business may take once you’ve moved on. Your clients may have questions about who will take over for you, or what kind of service they can continue to expect. Preparing for these kinds of questions can increase the likelihood that clients will stay with the firm, even after you’re gone.

Bottom Line

A couple review their retirement budget on their couch.

Preparing clients for retirement is an ongoing process that takes both planning and patience. The better you understand your clients’ fears, needs and goals, the easier it becomes to navigate conversations about the future. And that’s equally true when you’re discussing your own retirement as an advisor.

Tips for Growing Your Advisory Business

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Retirement planning software can help you develop financial plans for clients more efficiently. When researching software options, consider the full range of features and capabilities. Some programs, for instance, focus solely on Social Security planning while others take a more comprehensive approach. Beyond that, consider the cost you’ll pay, whether you’re making a one-time purchase or paying for a subscription service, the level of support offered, and the program’s integration with other parts of your tech stack.