By positioning annuities, and the benefits they offer, in the same way retirees understand and view Social Security your sales will skyrocket. Let’s take a look at the psychology of the retiree and how they view Social Security, and more importantly, what they don’t think about when thinking about Social Security. This is the key to how you can position and sell more annuities and at the same time manage your clients’ expectations so that they will always understand and get exactly what they thought they were getting.
How do retirees think about their Social Security?
- Retirees view this program specifically as a monthly income plan.
- Retirees can tell you exactly what they will receive in benefits at a given age. They know the income provided at 62, 65, 70, etc. There is certainty with the program and the income it provides.
- Retirees understand that the longer they wait to take income (don’t take it till you really need it), the more income they will receive.
- The income is actually increased by 4 percent to 8percent per year as they wait to start taking it. A boomer gets a whopping 8 percent increase each year they delay the income.
- Retirees view these benefits as stable, predictable and backed by the government.
What don’t retirees think about when it comes to Social Security?
- Retirees don’t ask or even consider: “How much money did I have to put into Social Security to get this monthly income?”
- Retirees don’t ask or consider: “What rate of return did I make on my money that I’ve paid into Social Security?”
- Retirees don’t ask or consider: “What is my account balance on my Social Security account for lump-sum withdrawal?”
I challenge you to ask your clients those three questions the next time you talk about Social Security, and you’ll quickly see they have no idea how to answer them. The only thing the client can tell you is the amount of income they get, or are expecting to get based on statements that they receive each year. This is the way they are programmed to think about Social Security, and it can be crucial in helping you position annuities correctly.
As you obviously know, very seldom will Social Security satisfy all of your clients basic income needs. If you can learn to position annuities like Social Security, and as the answer to fill the void between the income they are getting and the income they need to live the retirement they want, your clients will love annuities and your sales will be much easier. Clients won’t worry about the “Bonus,” “Cap” or “Spread” on their account, how much they earn, or how long the money is tied up, they’ll be buying it for the “Guaranteed Income for Life”based on contractual guarantee and without any empty promises.
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