Suggestions On How To Work With Retirees On Taking Income
Its one thing to talk about helping retirees arrange for their income needs, but planners and advisors are starting to ask, just how do you do this?
Several speakers here at a retirement income conference offered some ideas. The meeting was sponsored by the National Association for Variable Annuities, Reston, Va.
One suggestion is to address longevity issues outright. Its “terrible” to tell people they will likely live into their late 70s, when the likelihood is that at least one of two 65-year-old spouses will live into their mid-80s, said Donald Ray Haas, president of Haas Financial Services, Inc., Birmingham, Mich.
“We should look at a couple, and approach their income as if it were going to go on forever,” said Haas, who is author of Financial Planning for The Baby Boomer Client (published by The National Underwriter Company, Erlanger, Ky., which also publishes National Underwriter Life & Health/Financial Services.)
Displaying a photo of a four-generation family, he added: “This will probably be your family!” Plan with that in mind, he suggested.
Also, factor in the likelihood of inflation, Haas said. When a person retires, for instance, consider using a high percentage of equities for several years. Then gradually shift the client to fixed instruments. When should that shift to fixed start? “I dont know!” Haas quipped, pointing out that people are living so much longer today that its hard to say. Planners have to rethink their portfolio ideas, he said.
Another idea from Haas: “counsel” your baby boomer clients, rather than “sell” to them.
The selling approach entails spending “some” time in fact-finding with clients, a lot more time in making presentations, and even more time in closing, the planner indicated. Haas used to do that himself, but he said he soon found it doesnt work very well. “Boomers want information, advice and counseling,” he explained. “They dont like authority or to be told what to do.”
It works much better to spend a lot more time on fact-finding, he said, noting he routinely spends up to two hours at this stage. Then, spend less time on the presentation, and very little time on the close.
Clients who participate in the counseling sessions leave the first interview feeling “elated,” Hass said. And, when they return for their recommendations, he said the close is a “slam-dunkI never hear them say, `I cant do that.”
He said he has had a “fantastic” career doing this over the past 20 years. The reason, he suspects, is because “it places the client first.”
When helping clients with the wealth distribution and transfer phase of their lives, keep in mind that “planning is the product,” suggested Phillip G. Lubinski, managing director of Allmerica Financials Colorado agency in Denver.
The retirement market “is about planning, relationships and quality of advice,” he maintained.