The top concern among many individuals aged 45 to 65 is maintaining their current standard of living. Pre-retirees often have concerns about:
- Not maintaining current standard of living
- Health-care/prescription costs
- Availability of Social Security
- Outliving assets
- Inflation of U.S. dollar
- Market conditions/performance during retirement
- Leaving legacy for children/heirs
- Impact of taxes on income
- Paying for children’s education
- Caring for elderly parents
Unlike previous generations, nearly 20 percent of American retirees expect to continue working in retirement in order to supplement their retirement income or provide reasonable insurance coverage.
The best ways to set yourself apart from other advisors is to put annuity suitability standards into your presentation. This will engage the customer in a discussion and earn their trust.
“Suitability information” means information that is reasonably appropriate to determine the suitability of a recommendation, including:
- Annual income
- Financial situation and needs, including the financial resources used for the funding of the annuity
- Financial experience
- Financial objectives
- Intended use of the annuity
- Financial time horizon
- Existing assets, including investment and life insurance holdings
- Liquidity needs
- Liquid net worth
- Risk tolerance
- Tax status
In making a recommendation, it is critical to gather information that is specific to a client’s circumstances.
Ask questions like:
- When will you need access to your money?
- Will you need income from the assets in the annuity?
- What will you use for emergency funds?
- Will the assets be passed to your heirs?
- What death benefits do you want to have, or not want to have, on the annuity?
Use these answers to determine the correct surrender charge length, liquidity and annuitization needs, as well as death benefit requirements.
Three strategies to manage your client’s assets.
1. Tax deferral
The number one rule: Your clients should only pay income taxes on their earnings when they need to withdraw their money.
Seniors are validly concerned about losing their money in the stock market.
3. Guaranteed income