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5 Numbers Every Financial Planner Needs to Know
Getting your financial clients attention is easy when you present these telling numbers.
There are a lot of big numbers that impact our financial well-being. If you know what the major trends and numbers mean, then you will be better able to help people prepare for financial security during retirement. Here are five important numbers that you should know to help people protect their nest eggs in the future.
10,000 Americans Turn 65 Daily
Every day, 10,000 Americans turn age 65. With the combination of aging baby boomers and medical advances to help people live longer, the number of older adults is increasing rapidly. According to research by the UN, AARP, and others, the number of older Americans will double in the coming decades and will represent an increased percentage of the US population. Financial planners are key players in helping the aging population achieve financial security. Knowing that there will be an increasing number of retirees who will be living longer than in the past is an important aspect of proper financial planning for today’s clients.
67% Worry about Retirement Savings
Studies by the National Institute on Retirement Security show that more than 2/3 of Americans (67%) are worried about an approaching retirement crisis. Fear regarding running out of money is one of the most common concerns of older people facing retirement. Financial advisors are ideally positioned to assist Americans with this very real and prevalent fear. Most people do not believe that they have enough money for retirement, and the solution to this growing problem is not going to be a Robo-advisor. With proper guidance, budgeting, and discipline, people facing retirement can achieve more financial security than they believe is possible.
$68 Trillion Generational Wealth Transfer
According to Cerulli Associates, more than 68 trillion dollars will transfer from one generation to another during the next 25 years. Both the older and the younger generations will need financial advisory services to make sure that this multi-trillion-dollar transfer will not be squandered. Families want success for their younger generations. Estate planning attorneys are an important part of this process, and so are financial advisors. What can you do to help multiple generations of clients achieve financial success?
$36 Billion Annual Losses from Elder Fraud
Elder fraud is estimated to cost older Americans more than $36 billion every year according to surveys conducted by True Link Financial. These losses from elder fraud are divided into three large buckets: (1) scams by strangers; (2) exploitation by someone close to the victim; and, (3) “legitimate” businesses that target older adults with inappropriate goods and services. These crimes can impact anyone, and some people are impacted more than once. Most people eventually have some amount of age-related cognitive decline; victims are not just people facing dementia and other serious conditions. Financial planners should help protect their clients from fraud and provide guidance on financial safety while aging.
$300,000 Needed for Healthcare Costs
Fidelity estimates that the average retired couple age 65 in 2021 will need $300,000 to cover the growing cost of healthcare. This number does not include healthcare costs that are covered by insurance and Medicare. For millions of Americans, $300,000 is a lot more money than they anticipate spending on medical bills during retirement. There are lifestyle and health choices that can make a big difference related to when a person needs healthcare assistance, but for most people, these costs will be incurred eventually. The financial advisory industry is well-positioned to help Americans prepare for healthcare and the other rising costs associated with retirement.
A person’s individual goals, net worth, investments, and other resources are all important in creating a financial plan. Knowing the big numbers that impact all Americans can help financial planners prepare their clients for a brighter financial future.