Close Close

Retirement Planning > Retirement Investing

Overcoming Retirement Planning Inertia in 30 Days

Your article was successfully shared with the contacts you provided.

People already enmeshed in a saving routine usually continue to save, whereas people without a plan often continue on that course as well, even if they admit a desire to get on track “soon.” As we know, the longer the investment horizon, the more time clients’ money can work for them. And, though it is never too early to begin planning for retirement, it’s never too late, either. In 2006, America’s most talked-about generation, the baby boomers, began turning 60. Not only are the boomers this country’s largest generation, they are also the wealthiest, with spending power of more than $2 trillion a year.

Yet many of them are not as prepared as they could be for their retirement. Perhaps it’s because boomers refuse to act their age. “If you address boomers as senior citizens, they’ll refer you to their parents,” says Marc Freedman, founder of a California-based boomer think tank called Civic Ventures.

These same people who, in their youth, were responsible for the culture-shattering hippie phenomenon, continue to defy convention by being more vivacious and active than the seniors of yesteryear. Though their vitality is admirable, the golden years are still closing in on these ex-flower children, and they need to finance their retirement somehow. Those who have not yet started or have only halfheartedly begun can certainly use your guidance to get focused and start moving immediately. Here are seven steps to creating a retirement plan for your boomer clients.

Step 1: Obtain an appointment with a prospective client
Assertiveness goes a long way toward efficiency. Don’t be afraid to ask potential clients to prepare ahead of time for your initial meeting. Offer to email or fax them a checklist that will help them collect copies of their financial documents that they can bring along. Not only will this make your meeting more productive, it will help the client feel organized and confident that nothing has been overlooked.

But don’t stop there. Immediately send a letter confirming the dates and times of the meetings, and include a list of necessary documents and data the client needs to bring. Then, call the client a couple of days before the meeting to ensure they do indeed come prepared.

Step 2: Conduct a discovery and profile meeting
At your initial meeting, establish and define the retirement planning process and the client-planner relationship. Consider using a small personal tape recorder to ensure that nothing is overlooked. You can continually refer back to the tape to make sure you have identified all of the client’s goals and concerns.

Begin by reviewing the client’s data and identifying any missing information. To avoid delays, give clients a self-addressed overnight mail envelope so that they can send any missing information to you. You should immediately copy all documents and return the originals to the clients as soon as possible.

The first meeting is also your opportunity to understand the client’s goals and discuss ways to prioritize their objectives. This helps you gain your client’s commitment to the planning process; simply collecting a check and getting the client agreement signed does not mean the clients are fully engaged.

You should encourage your client to tell you about their current retirement strategy, if one exists, so that you can more fully understand the goals they hope to achieve. You should then conduct an analysis of their retirement plan. This is a process by which you examine their plan’s strengths, weaknesses, opportunities, and threats. Be sure to consider all possible sources of possible income, as well as all anticipated annual expenses (See sidebar for examples of what this may include).

Step 3: Enter plan data, send in fees and documents
Once you have gathered accurate and complete data, enter the data into your retirement planning software within 72 hours of the client meeting. This keeps the details fresh and allows you to identify information gaps early in the planning process.

If possible, delegate this task to a responsible member of your staff. Doing so frees up more time for you to spend face-to-face with clients.

Step 4: Conduct a confirmation meeting
This is the point at which the client should look over the data for accuracy. This is not the time to focus on charts, graphs, and calculations. You want to use this time to have the client reaffirm their goals, review their retirement plan, and confirm all assumptions, including those pertaining to the inflation rate, mortality assumptions, rates of return for all modules, needs for each module, and risk tolerance.

Step 5: Conduct a strategy meeting
The critical focal points are to reconfirm the client’s goals while reviewing a draft of the actual retirement plan and plan alternatives. Be sure you validate the data, especially their net worth, cash flow, and projected needs. Then spend time validating what the client wants to see in the alternate plan. Spending most of your time on these activities keeps the focus on strategies and advice. This is the power of retirement planning.

Step 6: Make the final changes and print the retirement plan
Your job is to cause the client to act positively and meet their retirement goals. Be careful not to get caught up in endless rounds of plan changes geared toward vague “what if” scenarios that may have little or no impact on plan calculations. It should take no longer than five days to have the plan printed and returned to you so that you can deliver it to the clients.

Step 7: Implement the plan
Schedule a final meeting with your clients to ensure that your solutions are in line with their retirement priorities. You should be prepared with partially completed applications, sales illustrations, brochures, and prospectuses using the clients’ data. Remind the client that implementing the plan brings them one step closer to satisfying their retirement goals.

Your clients should recognize the value of the advice you’ve given them. If they are pleased with the plan, they will likely tell others. Now is the time for you to ask for referrals.

When people first think of retirement, they dream of leaving their jobs. With careful advanced planning, that is a realistic possibility for many Americans. But their second thoughts should involve how they will meet the expenses that continue to roll in even when they no longer have work-related income. The sooner people know what they’ll need, the better they can prepare. Your clients may be on their way toward potentially achieving their retirement goals in 30 days or less, but you must put them in motion.

Kirby Noel is senior vice president and national sales manager for AXA Distributors LLC, the wholesale distribution company of AXA Equitable Life Insurance Company, a member of the global AXA Group. Noel oversees the sales of variable annuities via the financial planner channel. He can be reached at 212-314-5685 or [email protected].

Potential Income Sources, Expenses

Expected income
List all sources, both guaranteed and non-guaranteed, from which the client expects to receive income during retirement:
Social Security Pensions
Annuities/life insurance Stocks
Bonds Mutual funds
Personal savings CDs
IRAs Real estate
Defined contribution plans Full-time/Part-time job

Anticipated annual expenses
Their work income may stop, but fixed expenses continue. Knowing exactly how much is needed to maintain their lifestyle will be critical to helping clients plan for the retirement they have in mind.

Housing The cost of the mortgage or rent, maintenance, utilities, and insurance
Food Groceries and dining out
Transportation Loan payments, fuel, maintenance, and insurance
Health care/insurance Premiums, copayments, drugs and non-covered services; long term care insurance and long term care costs
Personal care Clothing, products, and services
Taxes Income and property
Discretionary Gifts, charitable giving, entertainment, travel, recreation, hobbies, education, family care, etc.