As target markets go, the baby boomers are a desirable one and it’s not hard to pinpoint why. They’re entering retirement in unprecedented numbers, armed not only with more resources than prior generations but also with more questions. They need financial advice, a fact that many will readily admit. Still scarred by the market crash of 2008, this wave of retiring boomers has demanded a whole new brand of income planning, dubbed, appropriately, retirement income planning. It’s one of the Big Ideas of 2014 in the financial planning space, and savvy advisors are embracing it as a refreshingly holistic strategy.
“[Retirement income planning] draws attention to the real problem: How much can I be guaranteed to have arriving in my bank account each month when I retire?” says Dee K. Carter, one of more than 300 respondents to Retirement Advisor’s recent boomer survey.
To answer this question, advisors rely on an assortment of products, including life insurance (82 percent say their boomer clients are interested in it), fixed annuities (78 percent), mutual funds (42 percent) and variable annuities (40 percent). They also stay in frequent contact with their boomer clients, providing high-touch service that builds trust and a sense of security. Sixty-two percent of survey respondents said they interacted with their boomer clients either extremely often or very often.
Read on to learn key five retirement truths that our survey respondents shared with us. Your boomer clients will thank you.
1. Holistic planning is critical.
We hear it over and over again: Boomers can’t stand the straight sales pitch. They want a high-level plan that will take into account not only the issue of longevity — a real concern these days — but that will meet a multitude of diverse financial planning needs. “Legal estate planning too often gives too little attention to income tax planning,” noted survey respondent Stephen D. Wiley. Retirement income planning involves insurance, financial management/investing, and tax planning. All are inextricably intertwined.”
Rick Peterbok echoed this sentiment: “Knowledge and a complete holistic evaluation of all options is critical for boomers. It’s not enough to simply have a strategy about a product that you understand or feel you want to sell.”
Survey respondent Ed Cofino sees a benefit in this type of planning for clients and advisors alike: “Retirement income planning is a complete financial process, which can lead to more trust, more sales and more referrals. Product sellers leave money on the table everyday.”