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How to keep up with client goals as they change

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Most advisers are aware that financial goals and concerns change with time. However, there are specific strategies that can help clients achieve these changing goals that planners might not be aware of.

While saving for retirement is a priority across every generation, younger investors express distinctly different concerns compared to their older counterparts, according to a Jefferson National’s Advisor Authority study. By understanding what matters most to each generation and how those preferences will change over time advisers can better serve clients.


Millennials are starting their careers, and starting to build their wealth. Although the popular image of millennials is of a single, recent college grad, this group also includes individuals who are starting a family. Therefore, this group is challenged by balancing immediate needs, such as paying off student loans, with future goals. This is reflected in millennials’ top three financial concerns, which include financing a large expense (31%), financing children’s education (30%) and saving enough for retirement (26%), according to the study of over 1,400 advisers.

However, millennials have a big advantage in time. To make the most of millennial clients’ long time horizon, tax-deferral is essential. Advisers should help millennials understand which tax-deferred vehicles allow them to accumulate more for retirement, while providing adequate liquidity to fund large expenses and education.

Your millennial clients should consider the following investing insights:

  • Prioritize retirement and maximize employer match: Millennials should start early and leverage the compounding power of tax-deferral by investing as much as possible into 401(k) plans.
  • Use Roth IRAs to fund education expenses: When colleges estimate a client’s ability to pay, retirement accounts are not counted, while 5.69% of assets in 529 plans are. Roth IRAs, funded with after-tax dollars, are advantageous when earnings and income taxes are low. Also, early distributions for qualified education expenses are typically tax-free.
  • Maximize tax-efficiency: Consider tax-efficient equity funds and ETFs in a taxable account after clients max-out 401(k) and IRA contributions.
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Gen-Xers are in their prime earning years and poised to build more wealth. With increased earning power comes the ability to manage current expenses and save more for the future, as well as the challenge of bigger tax bills. This is reflected in Gen-Xers’ top three financial concerns which include saving enough for retirement (47%), managing taxes (30%) and funding children’s education (22%), according to the study.

Your Gen-X clients should consider the following investing insights:

  • Max-out qualified accounts: In their prime earning years, clients should max out contributions and employer matching to their 401(k), along with maxing out traditional IRAs and Roth IRAs if possible.
  • Invest in 529 plans: When clients are on track to reach their retirement goals, assets earmarked specifically for college can grow tax-deferred in 529 plans, while often lowering state taxes.
  • Access more tax deferral with IOVAs: After maxing out the low contribution limits of qualified plans, low-cost investment-only variable annuities offer virtually unlimited capacity for additional tax-deferred investing.
  • Leverage asset location: To enhance returns without increasing risk, and expand the spectrum of investment options, locate tax inefficient assets in tax-deferred vehicles.
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With baby boomers shifting into retirement at a rate of nearly 10,000 per day over the next 19 years according to the Pew Research Center, their focus is distinctly different from younger investors. This is reflected in boomers’ top three financial concerns, which include cost of healthcare (40%), protecting assets (35%) and generating reliable income during retirement (30%).

Healthcare costs are baby boomers’ number-one concern. Despite low headline inflation numbers today, advisors should assume a much higher rate of inflation for healthcare costs—with conservative estimates of 11% or more.

The more that boomer clients accumulate, the more income they can generate — and the more unexpected expenses they can manage. Boomer clients should consider the following investing insights:

  • Continue maxing-out qualified plans: This includes catch-up contributions for clients who are 50 or older.
  • Continue to access more tax deferral with IOVAs: With virtually unlimited capacity for additional tax-deferral, low-cost IOVAs can provide ongoing tax-deferred growth during retirement.
  • Consider alternatives to fixed income: When approaching retirement, alternatives such as managed futures, hedged equity or defined outcome solutions, can help manage downside risk while providing greater upside potential than fixed income.
  • Leverage tax diversification: A mix of different tax-deferred vehicles and other tax-deferred qualified accounts allow clients to draw down at different rates of taxation to minimize tax cost, while IOVAs can continue to grow tax-deferred.

Successful advisers understand that financial concerns can be materially different for each generation of investor. Advisers can create greater value for clients by adjusting their business model to fit the generational needs. Ultimately, by providing for clients the right solutions at the right stage of life, advisers will create greater value for their firm.

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