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Create a sale by defining your goals

by Jack Marrion

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In retirement planning, consumers often talk about the broad goal of retirement without defining what that really means. That makes it difficult to create the short-term motivation needed to make a decision today. The advisor can help by getting consumers to define what they really want and then creating narrow goals to hit the broad one.

Say a 56-year-old prospect says he wants to be able to retire in 10 years and maintain his lifestyle. The advisor should first help the consumer determine the dollars needed to reach this goal. If the broad goal of “maintain lifestyle” could be defined as “I would like to receive $12,000 a year in addition to Social Security,” then specific goals can be set.

Planning for a lifetime of benefits
And what can actually be done today to produce $12,000 a year at age 66? Lifetime withdrawal benefits work especially well because what is needed to be done today to reach long-term goals can be better defined.

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The advisor might suggest using an annuity with a lifetime withdrawal payout of 5.5 percent at age 66 that guaranteed withdrawal payment growth of at least 7 percent a year before withdrawals begin. With this available, the agent could then offer a choice of narrow goals to reach the broad goal?either move $111,000 today from current money earmarked for retirement to the annuity or place $16,000 per year in the annuity until age 66.

Annuities with lifetime withdrawal benefits work especially well because a narrow goal can be defined. Putting in the premium mentioned will produce $12,000 a year as long as the annuity carrier is still around. This narrow goal is more motivational for the consumer.

Getting specific
The salesperson has helped the consumer define the broad goal (the goal is not the intangible dream of “retirement” but a specific one of getting $12,000 a year) and then the broad goal is narrowed so that it requires an action: Put $111,000 into this annuity today. If the narrow goal seems impossible, the advisor can help the consumer redefine the broad goal (delaying income until age 70 drops the yearly premium to $9,675 or the single premium to $84,615) so that the narrow goal still motivates. This also creates motivation to go beyond the narrow goal. The consumer knows what it takes to produce $12,000 a year, so what would it take to generate $18,000 in 10 years just in case inflation averages 3 percent? What the advisor has done is taken an abstract goal and changed it into a concrete goal requiring action today.