In a recent survey, senior and boomer clients told us that the lack of a solid retirement plan continues to keep them up at night and cause them to work longer than they would like. According to the latest figures roughly 10,000 individuals are retiring every day.
Advisor Lloyd Lofton, LUTC, CSA, has mapped out a plan to help these retirees and pre-retirees get a better handle on their biggest retirement concerns. Lofton says that while “individual circumstances (for mature clients) may differ, their underlying needs will be quite similar.”
For Lofton there are a few key questions that need to be asked to help your clients better grasp their situation and will help advisors overcome some of the most common obstacles.
Problem: How can your clients increase their income without decreasing the safety of their investment?
Solution: We are all familiar with the old saying “Don’t put all your eggs in one basket.” Suitable diversification of assets in an annuity could add to the safety of your client’s portfolio
Problem: Your client may be worried that a lawsuit, a bankruptcy caused by major medical bills or liens from creditors that could take their lifetime savings and could affect the funds they have for their retirement years. Many financial accounts are subject to such claims. How can your clients protect their lifetime savings for their own retirement income?
Solution: Annuities may offer special protection from creditors, lawsuits, bankruptcies, etc. under creditor laws in each state. Their lawyer can give them specific information about their state.
Problem: Your client may have invested in bonds to protect their savings and receive regular interest income. They may not have realized that when interest rates increase, the value of their bond principal could decrease.
Solution: With a bonus annuity, it may be possible for them to increase their principal immediately, thus helping them recover losses on their bond portfolio and protecting 100 percent of their future principal.
Problem: Lately, market investments may have performed well. Your client may be concerned, however, that the market won’t continue its upward trend forever.
Solution: To offset the effects of inflation, an annuity could offer potentially higher benefits as a result of compound interest.