What retirement issue has hit you or your clients out of left field, and how did you resolve it?
I have a handful of clients that retired prior to age 55 and are taking substantially equal payments under Rule 72T for retirement income. With a market decline such as this, even with a well-balanced and well-allocated portfolio, it may be difficult to recover. They’re in serious danger of running out of money. They are allowed under IRS rules to decrease payments once, but that may not be an option for people already stretched thin with their budgets.
I have written letters to congressmen, contacted FSI [the Financial Services Institute] and called for help from my back office to try to get regulatory changes put in place to allow clients to decrease the amount they are taking, but also put it back to the original percentage once the account recovers. With the recent changes made to RMDs [or required minimum distributions], there is hope someone is listening. The other option is to encourage the client to return to the workforce. This will be the best option for them in the long run.
What prospecting methods have been most successful for you in attracting retirement-planning clients?
Most of my retirement planning clients are obtained by referrals. I find that the accounts are larger, the trust is gained faster, and the loyalty to stay with me is deeper. We also have small round-table discussions with two or three couples on a particular subject.
Do you face any frequently occurring retirement-planning mistakes with prospects?
Most of the problem prospects I meet with have one issue in common: They not saved enough for retirement and they expect to be able to take eight to 10 percent out of their account until they die!