6 Tips to Kickstart Succession Planning with Your Business Owner Clients
Here are 6 tips you can share with your business owner clients to help kickstart their succession planning.
Health care is likely one of the largest costs that many of your clients will have in retirement. According to Fidelity’s recent health care cost estimate, a couple retiring today needs approximately $300,000 to cover medical expenses1. Clients may underestimate their health care expenses in retirement, or these discussions might not be at the top of their minds. Knowing this information, you can arm yourself with different insights and tools to help your clients with their health costs at every stage of retirement planning.
While having the discussion about health care costs in retirement is important, you will likely be dealing with clients at all different stages of their retirement planning. Whether your clients are in their early career, mid-career, pre-retirement (50+), or early retirement, we’ll dive into different potential strategies and conversation starters you can have with your clients to help with their health care cost planning.
According to Nationwide’s 2021 Health Care Costs in Retirement Consumer Survey, more than a third of working adults 25+ (35%) have an HSA available and are contributing to it. Out of this number, the majority (61%) plan to use their HSA to pay for today’s health care expenses only2. This presents a conversation opening to talk to your clients about using their HSA as a potential investment opportunity. Not only can they use it as a potential investment vehicle, but it is also a tax-efficient way to save for their future health care costs in retirement.
Our white paper on Health Savings Accounts dives deep into key features and benefits, how to use an HSA, different HSA scenarios, and more.
When it comes to long-term care, your clients may underestimate these costs and not be prepared. According to our 2021 Nationwide Long-Term Care Consumer Survey, more than 6 in 10 are uncertain about costs as they relate to specific long-term care options3. As a financial professional, you can provide knowledge to your clients to help them prepare.
There are many benefits to helping your clients with long-term care planning now.
Some of these benefits include:
As your clients are thinking of the options for long-term care, the thought of a traditional nursing facility comes to mind, but there are many options related to long-term care including In home health care, assisted living, and nursing homes.
While working with your clients, you can utilize our long-term care cost assessment tool to help them plan for these costs.
As your clients get closer to retirement, you should consider having discussions on how to reduce their taxable income in their retirement years. While you don’t have to be an expert on taxes, it is important for you to understand how taxes can have an impact their retirement.
Some benefits of a tax-efficient retirement income strategy may include:
Our white-paper provides tips on how you can build tax-efficient retirement income plans to help your clients. Assisting your clients with these strategies could provide them with more income in retirement to be able to pay for their health care expenses.
You may encounter a situation with your clients where they retire earlier than when they are eligible to receive Medicare. At this point, they will need to figure out their health care options and how they are going to pay for them.
There are a few different choices when determining their health care options4 :
If your client retires earlier than expected, they will likely also need to figure out how to pay for these expenses. One option is a single premium immediate annuity (SPIA). This will begin income payments soon after your client makes an initial lump sum investment, which makes them a good option for people who are ready to begin their retirement.
You don’t have to be a Medicare expert to know the basics to help get the discussion started with your clients. Medicare comes with premiums, deductibles, co-pays, and co-insurance, so it’s good for your clients to know what to expect so they can plan for their costs accordingly. Your clients will become eligible for Medicare when they turn 65. There are a few options when it comes to coverage.
We have a full Medicare 101 guide that goes over the Initial Enrollment Period (IEP), Medicare costs, Medicare options, as well as Medicare resources.
As we discussed above, health care costs in retirement can really add up. It is smart to have these conversations with your clients now, so they understand the potential costs associated with health care in retirement and are prepared for whatever comes their way.
2021 Nationwide Health Care Costs in Retirement Consumer Survey, conducted by The Harris Poll on behalf of the Nationwide Retirement Institute (2021). The tenth annual survey was conducted online within the United States from August 5-24, 2021, among 1,817 adults ages 25 and older.
2021 Nationwide Long-Term Care Consumer Survey, conducted by The Harris Poll on behalf of the Nationwide Retirement Institute (2021). The tenth annual survey was conducted online within the United States from September 20-October 12, 2021, among 1,812 adults ages 25 and older.
Investing involves market risk and there is no guarantee that investment objectives will be achieved.
Federal income tax laws are complex and subject to change. The information is based on current interpretations of the law and is not guaranteed. Nationwide and its representatives do not give legal or tax advice. Please consult an attorney or tax advisor for answers to specific questions.