How an Advisor Gets Clients Under 50 to Save for Retirement

What are some of the recommendations you are making to young people regarding retirement savings? Is it as simple as encouraging them to save in a 401(k) or IRA?

Yes, so we always want to start with directing as much as is feasible to tax-advantaged retirement accounts, whether 401(k)s or IRAs. For our business owner clients, we’re looking at things like setting up solo 401ks or SEP IRAs for them.

Something else we actually focus on is helping to make sure people aren’t following misinformation that is presented online, for example the trends you might see on TikTok about building so-called “passive income.” Things like buying a property and putting it on Airbnb.

Of course, passive income sounds like a great way to build wealth for retirement. But the reality is that, a lot of the time, what is presented online as passive may not necessarily be passive — especially if you’re planning to purchase a property and then you want to put it on Airbnb. In reality, that is a pretty active form of income.

We educated clients about the fact that hey may need to hire a property manager, and there are cleaning expenses to consider. And what happens when someone gets locked out from the property at 2 a.m.?

Does your client base have a shared vision for retirement or does it really vary based on the individual?

I would say it varies a lot. Some people envision traveling, some people envision founding a new passion business, and others envision other things. It’s actually been a lot of fun in getting to know people and going through this planning with them.

One interesting story is that, a few months ago, I was talking to a client and he was expressing frustration with seeing his paycheck reduced month after month because of retirement plan contributions.

So, what I did was ask him, what would he do if he suddenly didn’t have to work right now? What would it look like? And he paused for a second and he said, “You know, I would really love to coach high school basketball — just for fun.”

That gave me an opening to say, well, when you’re putting that money into the 401(k), as frustrating as it is that we’re making the sacrifice today, I want you to keep that in mind that this money is going towards that vision — to get you to the place where you can be a high school basketball coach full time, just for fun.

That really resonated with him, and it’s a visualization technique I try to use especially with our younger clients where they feel like it’s a bit of a chore — putting money into retirement accounts.

Do you spend any time thinking about your own retirement and what that might look like? Or is it still too far away?

Oh, of course! I’ve definitely already envisioned my own retirement.

One part of family are from Trinidad and Tobago, which is the last island in the Caribbean, and it is probably one of my favorite things to do every year, to go down there and visit family and spend some time.

I’ve always had fun aspirations for a bed and breakfast down there, and just spending some time on the beach—maybe having a restaurant. So that is something that I think about pretty frequently if I’m having a tough day at work. How do I get closer to spending my days on the beach, in my bed and breakfast and in my beach shack?

Pictured: Chelsea Ransom-Cooper