Almost everyone under age 50 understands the need to plan for retirement. But that doesn't mean everyone follows through.
Financial advisers often urge younger clients to save now if they want to retire later. Yet advisers can get fed up when their entreaties fall on deaf ears.
In an effort to prod clients to treat retirement planning as a top priority, some advisers get creative. Rather than preach, they use graphs and even interactive games to convey the benefits of smart saving habits at a young age.
"Young adults think they have plenty of time to invest in retirement, and often have trouble when long-range investing competes with short-term goals like buying a house or car," said Andrew Russell, managing partner at Dean Roland Russell in San Diego. "I remind them that retirement planning is just as important as their short-term goals,that no one else is saving for their retirement. But it can be difficult to sell them on that."
A Guessing Game
Reluctant savers tend to take retirement planning more seriously when they grasp the concept of compounding. Advisers go to great lengths to educate younger clients on how their money will grow if they start saving sooner rather than later.
Constance Stone, a [CERTIFIED FINANCIAL PLANNER™ and CFP Board Ambassador], likes to play guessing games with clients. She'll pose a hypothetical ("Say you save $1,000 a year for 20 years and earn 5% a year") and ask, "What do you think that will be worth in 20 years?" Read more >
Investor's Business Daily
By Morey Stettner
February 21, 2014