Things are on track for your clients. They have diligently saved and invested for retirement. With your help and advice as well as their investing during a stock market hitting record territory, their nest egg is in good shape and will provide a nice retirement income. Additionally, you’ve helped them plan their Social Security claiming strategy.

However, even with the most thought-out retirement plan, things can happen that can potentially disrupt or even derail it. Here are a few situations that might arise when your ongoing help and counsel will be invaluable. (For more, see: Why Clients Should Save More for Medical Expenses.)

A Down Market Early in Your Client's Retirement

A client retiring with a $1 million portfolio would certainly feel a pinch if the stock market dropped 20% or more over the course of a year or two. Depending upon their allocation, their nest egg could decline by 10%, 15% or more. Ideally you’ve planned for this as the client moved into retirement by utilizing a bucket strategy or similar approach. The bucket approach sets aside a portion of the client’s retirement portfolio in cash (or other very safe, liquid assets) to meet the client’s withdrawal needs for a period of time, perhaps one to three years or whatever is appropriate for the client’s situation.

Moreover, the retirement withdrawal strategy that you’ve developed for your client takes the market’s ups and downs into account. While a severe market decline early in a client’s retirement years (or in the years just prior to retirement) can potentially be devastating, your planning and guidance can help your client’s through these tense periods of their retirement.

Skyrocketing Healthcare Costs

A recent Fidelity study pegged the cost of healthcare in retirement for a couple at age 65 at $245,000. This is up from $220,000 in the 2014 version of the study, which doesn't include the cost of long-term care. If your client has not yet retired and has access to a health savings account (HSA), they should consider funding one and letting the money accrue until retirement. HSAs can be used to fund Medicare costs and a number of other qualified medical expenses. (For more, see: 7 Ways to Reduce Healthcare Costs in Retirement.)

The Risk of Inflation

Though inflation has remained at historically low rates for a number of years, this won’t always be the case. Any jump in inflation typically impacts retirees harder than others in that many are on a fixed or semi-fixed income.

For the second year in a row, there is no cost of living increase expected for Social Security recipients. While this is a reflection for the CPI—which measures inflation on a broad basis—some experts have criticized the use of this index to calculate cost of living increases for Social Security. They claim that the typical basket of goods and services purchased by seniors has exhibited higher levels of inflation than the CPI.

Planning for Taxes on Withdrawals

Tax planning for clients is crucial as they move into retirement. In fact, if your clients don’t manage their tax liability, they could easily end up short of their spending needs even if they start out with what seems like an adequate nest egg. A client with $1 million in a traditional IRA doesn’t really have a $1 million in spendable assets—withdrawals from a traditional IRA are subject to taxes at ordinary income rates.

Withdrawals from a Roth account are tax-free as long as the five-year rule is met. Advisors should consider Roth conversions if appropriate for their client's situation. The taxes paid in the year(s) of conversion, of course, need to be weighed against the potential tax savings down the road. (For more, see: 5 Tax(ing) Retirement Mistakes.)

Managing RMDs

Your clients will be subject to required minimum distributions (RMDs) from IRAs and other non-Roth retirement accounts at age 70.5. For some clients, the RMDs may not be needed as part of their retirement income stream and they’d prefer to minimize them and the taxes due.

One potential strategy is to convert some or all of the client’s traditional IRA assets to a Roth prior to age 70.5. The wisdom of this strategy will depend on the client’s situation and the benefit of saving taxes down the road versus the immediate tax hit upon conversion. Another consideration will be any estate planning benefits derived from the ability to pass assets in a Roth tax-free to the client’s heirs. If nothing else, converting some assets to a Roth can also provide your client with tax diversification in the future to hedge against any potential adverse changes in the tax laws in the future.

Another strategy to consider for clients who don’t need the distributions and who are charitably inclined is donating some or all of the RMDs to a qualified charitable organization. This is available to those who are aged 70.5 and is limited to $100,000. RMDs can be directed to qualified charitable organizations—all or in part. This portion of the year’s RMD will not be subject to taxes. There is no double-dipping as there is no deduction for the charitable deduction in this case. (For more, see: 6 Important Retirement Plan RMD Rules.)

Advice During Retirement Is Key

Retirement planning doesn’t stop once your clients retire. In fact, some would argue that helping clients manage the financial aspects of their retirement is at least, if not more, important than the work that you did for them during their years of accumulating their nest egg. Coordinating the client’s withdrawals alongside other sources of income is an ongoing balancing act, as is the management of the client’s tax liability. Management of the client’s retirement finances is an ongoing process that will likely require changes in approach at various times.

The Bottom Line

Your clients need your continued financial guidance as they move from work into retirement. Whether it involves their portfolio, managing withdrawals, tax planning, when to claim Social Security or a host of other issues, your guidance during retirement can help clients avoid some of the financial landmines that can derail the best-laid retirement planning efforts. (For related reading, see: Why Clients Should Save More for Medical Expenses.)