Spurring Boomers To Think About Income Planning
Remarkably few people take the time and effort to plan their financial future, says Bill Bachrach, president and CEO of Bachrach & Associates, San Diego, Calif.
This is so whether the person is a baby boomer approaching retirement or an adult in any other age group.
“Many people die without a will, too,” he says.
Still the growing trend among financial advisors is to target the baby boom generation for retirement and income planning services, he says. The size and projected longevity of the group are key factors in this.
But, given the reluctance of people to do such planning, how can an advisor spur a boomeror anyone elseto talk turkey on the subject? Advisors interviewed by National Underwriter agree this can be a challenge. Still, they say, advisors who employ sound planning practices often meet with success.
In fact, says Briggs Matsko, “I generally dont have to spend a lot of time getting clients to think about retirement.” Matsko is a senior planner and executive vice president of California Fringe Benefit, a Sacramento, Calif., subsidiary of Lincoln Financial Advisors.
Throughout the years, Matsko says, “Ive been instilling in my clients the values of saving for the long term.” This paves the way for the income planning discussion. It is a process-driven approach, he says, not product-driven.
How does it work? Matsko begins by working with people to establish goals. Concerning retirement, he nudges them to “envision” and “crystallize” their retirement.
“Most people are abstract in their ideas about this,” explains Matsko, “so our value added is to get them to talk about itwhat they will do; whether they will work part time; where they will live; whether they want to, say, play golf and if so, how many days a week; whether they will help put a grandchild through schoolWe also help them think about [how to maintain] their independence.”
This discussion can take some time–20 to 90 minutes or more–but Matsko views it as worthwhile. It is a “process of discovery,” he explains. It leads to setting goals and helps show clients why they need to do certain things. This makes for an easy transition to income planning for those who need it, he adds.
To move the discussion along, he shows clients a “Retirement Income Matrix” (a pyramid) that he created as a visual aid. It identifies core expenses, joy expenses, accumulation goals and wealth transition issues that clients face in retirement.
Depending on what needs to be done, Matsko may have three or four appointments with a client before a plan is set up. But that process often leads to selection of products to help implement the plan, including income products.