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10 takeaways from the 2015 Retirement Conference

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LIMRA’s 2015 Retirement Conference, April 15-17 in Arlington, Virginia, was a great opportunity to pick up new ideas and learn key information about retirement and the most pressing retirement issues.

On the following pages, I’ve included ten key takeaways from the conference.

balance

1. Income strategies need balance

Don’t get too caught up with strict analytics when researching clients, according to Judith Zaiken, corporate vice president and director LIMRA Secure Retirement Institute research. 

“The most effective retirement income strategy is actually a subjective assessment as much as it is an objective one,” said Zaiken.

“A subjective assessment combined with a thorough look at the numbers can help an advisor develop a more effective retirement income strategy,” she said.

wealthy2. Wealthy Americans fit into three distinct categories.

Guarantee seekers – Have a floor of lifetime guaranteed income and would be interested in converting even more of their savings to a pension-like contractual guarantee.

Estate planners – Want to maintain personal control over investment decisions and to retain the flexibility to adjust income and spending as needs change over time.

Asset protectors – Will live off the interest and dividends of savings, but uncomfortable invading principal.

clueless3. Clueless consumers

Millennials are the most clueless demographic with only 30 percent of them knowing how much they should be saving. Boomers and Generation X aren’t much better with only 40 percent of folks having a clue about their savings needs.

“Not surprisingly, our study found that the majority of Americans — no matter their generation — are not confident that they will be able to achieve the retirement lifestyle they desire,” said Cecilia Shiner, associate research director, LIMRA Secure Retirement Institute. “If consumers aren’t confident that they are doing the basics correctly — like saving enough for retirement — it is unlikely that they will be confident of their retirement prospects.”

baby boomer4. Baby boomers need to save more

“With 7 in 10 pre-retirees reporting that their Social Security and pensions will not cover their basic living expenses, it is concerning that more than half of boomers have less than $100,000 saved for retirement and more than a third have less than $25,000 saved for retirement,” said Cecilia Shiner, associate research director, LIMRA Secure Retirement Institute.

man mirror5. Are you authentic?

According to a session at the Retirement Conference, advisors should ask themselves the following questions before talking to a client?

- Are you easy to understand?

- Are you down to earth?

- Are you memorable?

- Are you positive?

- Are you credible?

- Are you relevant?

uncle sam6. An economy out of sync

“The economy – both domestic and global – is experiencing a great slowdown. The U.S. economy grew by 1.5 percent in 2014. The success of the American economy is all based on 2.5 percent growth. So, missing those numbers throws everything out of sync,” said Tom Crawford, senior managing director, FTI Consulting.

security7. Retirement security?

“A broken retirement system is the real debt crisis. The retirement crisis will be the next big disaster in the U.S. The great 401k experiment has failed for many Americans. I believe that moving towards ‘annuitization’ ‘is a first step to helping bail out the retirement crisis,” said Tom Crawford, senior managing director, FTI Consulting. 

kfc8. Know your message

For years, KFC’s slogan was, “It’s finger lickin’ good.”

While that worked in Peoria, the direct translation in Chinese was, “We’ll eat your fingers off.” 

art9. What the heck?

Scott Kallenbach, director of strategic research at LIMRA, posed a question for the audience: “Does the language commonly used by the financial services industry motivate consumers to adequately prepare for retirement or does it confuse, intimidate and drive would-be buyers into a state of paralysis?”

After reviewing research material gathered by interviewing actual consumers, Kallenbach summed up the problem. “These are our customers out there and they don’t know what the heck we’re talking about,” he said.

margaritaville10. Wasted away again in Margaritaville

Kallenbach showed a video of consumers discussing industry marketing material. If one were to look at the material, they’d think all retirees were gorgeous, incredibly happy, and living a beachcomber’s dream life.

“But that’s not reality,” said Kallenbach. “Not everyone wants to live in Margaritaville. Most people I know are worried that they’re going to outlive their money.”