Reflections on HABU: As the Retirement Wave Hits, Advisory Services Can Help Clients Adjust

There’s been plenty of talk about the “Great Resignation,” but contrary to popular belief, it’s not necessarily being led by those looking for new careers, but rather by the Boomers who are getting out faster than everyone else. 

In just the third quarter of 2020 alone, nearly 30 million Baby Boomers ­– those born between 1946 and 1964 – left the job market and retired, according to data from the Pew Research Center. That’s 3.2 million more than the same quarter a year earlier. And while many Boomers are talking about retiring early, even if they don’t, 10,000 of them will hit retirement age each day by 2030.

The accelerating retirement boom represents a fruitful opportunity for CPA firm leaders. If you don’t have the expertise in-house, Engineered Advisory can connect you with a vetted group of providers helping to preserve wealth for clients leaving the labor force.


Here are a few ideas, presented by industry experts, at Engineered Advisory’s first Highest and Best Use (HABU) conference held recently in Plano, Texas:

Give the People What They Want 

Oggi Ruiz, senior marketing director of World Financial Group, urged firm leaders in attendance to get into financial planning services to meet the expectations of the wave of Boomer retirements (the so-called “silver tsunami”). “Who are they going to talk to? Why not you?”  

Ruiz noted that only half of accounting firms offer financial planning services. Those that don’t are likely to grow more slowly than other firms or even lose clients. Yet as the professionals who complete tax returns, review finances and see retirement accounts, they are the ideal people to refer their clients to experts. “Why not make your clients whole? Why not sit down with that client and advise them to speak with an advisor who knows what they’re doing?”

World Financial Group has a cadre of 120 providers to help. Ruiz also offered a little financial planning advice of his own, pointing out that he can help CPAs themselves shorten the time between working and retiring by advising them on how to stop under-charging for their services. 

Do Good While Doing Well Financially

Attorney Brad Gornto, president of iCLAT Solutions, says his company offers a “dumbed-down, stripped-down” (and well-established but little-used) charitable lead annuity trust that’s more appropriate for the owner of a Honda Accord than a Ferrari. “The IRS notices you when you’re driving one of those, and when it breaks down it’s expensive.” However, ideal clients must be donating at least $10,000 a year. A high-income earner who plans to retire within a couple of years could benefit significantly. 

In an environment of inflation and higher interest rates, it’s a good time to discuss the simple trust that is “reversionary,” in that it distributes annual payments to charity for a certain number of years, then returns trust assets back to the client at the end of the term. For example, according to Engineered Advisory, a 20-year iCLAT with annual payments to charity of $25,000 per year will generate an immediate, first-year charitable deduction of $433,477.

Think Outside the Box (or Cage)

Vince Nelson of Arno Wealth offered an unusual idea that could help clients build a sustainable retirement by combining their passions with tax mitigation strategies through alternative investments. 

Wildlife Partners, as one example, built a conservation business to protect endangered species. They raise at-risk animals on hundreds of acres outside San Antonio and sell them to conservation-minded landowners looking to repopulate a particular species while reaping tax deductions. In 2020, the businesses netted $6 million because they were able to depreciate 100% of their land costs in the first year through a provision in the Tax Cuts and Jobs Act of 2017, Nelson said.

Using Your Life Insurance In More Ways Than One

Nick Burgess, director of international accounts with The Burgess Group, discussed one method of mitigating estate issues for high-net-worth individuals and families – funding life insurance premiums through loans. While these clients have the ability to pay for insurance, financing premiums is the “single best way” to preserve and transfer wealth, according to Burgess.

Using pensions as a tax strategy is another idea. Mark DiTondo, a vice president of services sales atLafayette Life Insurance Company, went over numerous options, including buying life insurance within a qualified retirement plan – small businesses sometimes purchase life insurance as a funding option. The benefit is tax-deductible premiums. 

Engineered Advisory offered ideas like these to CPA firm leaders who are eager to provide more advisory services to clients clamoring for help and guidance from the professionals who know the most about their businesses and goals. Jeff Pawlow, president of the Engineered Advisory family of companies, urged CPAs – at the very least – to start a dialogue. “Here’s the thing. You’re going to have these conversations with your clients and sometimes they’re going to go nowhere, but you had the conversation. You didn’t leave the door open for your competitor to discuss that.” 

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