Subscribe to Florida Trend


June 20, 2018
How are you helping your clients to avoid being underfunded in retirement?


Sheri Billings, VP and Wealth Management Advisor for Billings Leace Wealth Management / Merrill Lynch Private Client Group

Wealth Management - Retirement Planning

How are you helping your clients to avoid being underfunded in retirement?

Florida wealth managers give advice in this special report.

Traditional retirement — leaving work at 65 to boat or play golf — is quickly becoming a thing of the past, as people live longer and want different things from their retirement years.

With pensions fading into memory, and Congress considering cuts to Social Security and Medicare, many Americans expect their 401(k)s to guarantee financial security. But most people underestimate what it costs to retire. Worse, Americans are withdrawing billions from 401(k)s or similar retirement savings plans for non-retirement spending.

Combine those dynamics with low interest rates, and some retirees or soon-to-be retirees are finding themselves with too little to achieve the retirement lifestyle they had planned.

Here is what some Florida wealth managers are advising.

Sheri Billings
First Vice President, Wealth Management Advisor
Billings Leace Wealth Management / Merrill Lynch Private Client Group
Fort Lauderdale

Sheri Billings says retirees are outspending their savings because of the current low interest rates, extended life expectancy and incorrect assumptions about rates of return. Many pension funds have the same problem, she says. “It’s the sequence of returns, not the average rates of return, that get one in trouble.”

Billings believes proper planning requires a reality check: “What are my goals in retirement? What am I actively doing today to get there? Am I saving enough today to allow me to support my lifestyle in retirement?”

Billings believes retirees often overlook costs such as health insurance and long-term care and the rate at which they will need to draw down their assets. She recommends that retirees assume they’ll withdraw 4% of their nest eggs each year. Other considerations should include how much they want to leave to heirs.

Billings looks at the value of a client’s portfolio, the various possibilities for growth and the individual’s tolerance for risk at various ages. Then she estimates how much the client will need in retirement and sources of income. Most important, she tries to identify and address potential gaps before retirement and ensure that clients understands the action needed to make up the difference. “You don’t want to be in the middle of retirement and be forced to adjust your lifestyle,” she says.

Coaching clients on how to build wealth for retirement has become more challenging because most people now lack confidence in their assets, Billings says. “Many Baby Boomers have lived through disappointments in stocks and real estate, and I fear the next disappointment will be in bonds.”

She sees investors reaching for yield by extending maturities on bonds or sacrificing credit quality. “They, frankly, do not understand the risk they are taking,” she says. She recommends clients strike a balance between stocks and bonds to better ensure a comfortable retirement.

Next page: Frank Armstrong, President, Founder of Investor Solutions, Miami

Tags: Banking & Finance, Wealth Management

Digital Access

Add digital to your current subscription, purchase a single digital issue, or start a new subscription to Florida Trend.

An overview of the features and articles in this month's issue of Florida Trend.


Florida Business News

Florida Trend Video Pick

VB-10000 at Port of Pensacola
VB-10000 at Port of Pensacola

A massive VB-10000 vessel spending a few days at the Port of Pensacola waiting out rough seas. Although it looks a bit like a roller coaster, it's actually a ship used in offshore oil operations. 

Earlier Videos | Viewpoints@FloridaTrend

Ballot Box

Are you optimistic that you'll have the financial resources for a comfortable retirement?

  • Yes
  • Maybe, am working on it
  • No
  • N/A - am already retired

See Results

Ballot Box