Tom Hegna opened the 2015 Advisor Network Summit his speech on how clients can have a guaranteed secure retirement. Hegna captured the room’s attention with his strong voice, just as one would think a former military officer’s voice would.
Hegna stated that our retirement is going to focus on one main thing: savings. Read on to see how he explained to get your clients to a happy, secure retirement.
Step 1: Have a plan
Thirty-five percent of people don’t want to spend more time working on financial planning according to the 2009 Hartford Life Insurance Company’s “The Hartford Investments and Retirement Survey.” But, also according to the study, the people who do plan out their finance have even a better outlook on their retirement future.
Here’s two questions your clients should ask themselves:
1. What do I need my retirement income to do?
2. What do I want my retirement to do?
How their plan looks should be a reflection of these two questions. Help your client’s avoid the “just-in-case retirement.” A plan will ensure that they won’t be afraid of actually using the money they worked so hard to save.
Step 2: Maximize Social Security benefits
Social Security is not a concept that many people take advantage of, Hegna said. Advisors should understand their own Social Security benefits so they can better help their clients.
Here’s what lifetime Social Security benefits could look like:
For singles: up to $500,000
For married/combined: up to $1 million
In general, Hegna said the breadwinner should delay Social Security benefits until age 70 if they can. Waiting until age 70 can be a difference of $570 a month.
Step 3: Consider a hybrid retirement
Hegna began this step with the quote: “Retirement at 65 is ridiculous. When I was 65, I still had pimples” – George Burns.
Explain to your clients that there are three benefits that can come from a hybrid retirement:
Increased Social Security benefits
A 2006 study by the Urban Institute discovered that people who work for just five more years can increase their income by 56 percent.
Step 4: Protect your savings from inflation
Inflation is one of the biggest aspects clients should worry about in retirement. Hegna added that the market is always changing. Currently over the past 25 years, the U.S. has experienced a period of relative price stability and low inflation but items such as food, gas and stamps have gone up. When ignored, inflation can make a huge difference in retirement income.