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Prevent Family Problems From Ruining Retirement Plans

Your client’s family could be a wrecking ball swinging towards their retirement chances. 

Family issues were the largest obstacles to retirement success discussed in “How Clients Can Prevent Failure In Retirement,” a panel discussion last week at Financial Advisor’s 9th Annual Inside Retirement conference in Las Vegas.

Because problems involving divorce and adult children pose such a risk to retirement, advisors need to think holistically beyond financial issues, said Lorraine Ell, CEO of Better Money Decisions and Better Insurance Decisions. Your client’s family could be a wrecking ball swinging towards their retirement chances.

“In general, we have to be more like coaches and guides,” said Ell. “We need to have responsibility for helping our clients make decisions around money.”

Divorce

One of the biggest problems Ell has encountered in retirement planning is the divorce of couples near or in their retired years.

So-called “grey divorce” is a rising trend among older couples, said Greg Sullivan, principal & CEO of Sullivan, Bruyette Speros & Blayney, for two reasons. One is that there is a greater sense of financial security among couples and people of all genders. The other is that social media is allowing older Americans to meet and fall in love more easily.

“We’re seeing more collaborative divorce, but it can lead to a worsening of outcomes for both parties,” said Sullivan. “When you separate the wealth you’ve accumulated as a couple, when you divide it in half, are you still going to be OK? The answer is usually no, you’re going to have much less—but you’re also going to be happier, so it’s still a good win.”

Sullivan suggests setting a meeting with both spouses, if possible, to establish transparency and discuss the financial processes involved in divorce. Afterwards, separate advisors should be assigned to each spouse.

 

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About the Author

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Lorraine Ell

CEO and Senior Financial Advisor

Lorraine is the CEO of Better Money Decisions (B$D) and co-author of the blog Better Financial Decisions. As a principal of B$D, she is excited to continue her long career as an investment professional which started when she worked in the 1980s as an advisor with Drexel, Burnham and Lambert and J.W. Charles and as co-owner of a Registered Investment Advisory firm.

Living and working in places as diverse as Jeddah, Saudi Arabia, and Budapest, Hungary has given her a unique perspective on the world of investing. Through these experiences she has learned that life can change in an instant and having a financial guide can make all the difference between a retirement fraught with worry and one with peace of mind.