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Retirement Planning > Social Security

Want results? Ask your clients’ opinion (part 2)

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Last month, I shared the first half of a presentation that I use to help prospects and clients organize their thinking about the economy and the way it will affect them and their money.

Understand that prospects often don’t know how to determine if what you’re sharing will help solve their problems because they haven’t thought about what their problems might be. As a result, it is hard to get emotionally invested in finding a solution to those problems.

After discussing taxes (the focus of last month’s column), I ask prospects if they think government benefits like Social Security, Medicare, and Medicaid will be lower in the future. They always say “yes.” And many believe they will not receive any Social Security benefits.

I then ask whether they realize there are 100 million Americans over age 50 — nearly half of the number of people eligible to vote. There will be 130 million Americans over age 50 by 2030. I ask whether those voters will allow anyone in government to prevent them from receiving the Social Security and Medicare benefits they have earned. They say “no,” adding they’ll punish anyone in government who touches those benefits.

As a result, the government will use sneaky ways to reduce those payouts. Here are some examples: increasing the age of eligibility; and reducing or eliminating cost of living increases. The government is already eliminating strategies to maximize Social Security benefits such as “claim and suspend” (which allows couples to use spousal benefits and “delayed retirement credits” simultaneously).

I also ask prospects if they think the U.S. can grow its way out of the problem. Japan has had negative growth or deflation for a decade. South America is currently experiencing negative growth.

Europe will probably continue to see negative growth for at least the next decade. Even China’s growth has fallen to a currently revised 6 percent growth rate that many believe is actually much lower, in the 2 or 3 percent range.

The Congressional Budget Office predicts the U.S. economy will be fortunate to average 2 percent annual growth over the next decade. We have actually had several quarters of negative growth in the past few years.

I then ask this amazing question:

“If we can’t tax our way out of trouble and we can’t reduce benefits enough to fix the problem and we can’t grow our way out of our current situation, where will we get the money for Social Security, Medicare, Medicaid, Defense, Homeland Security, Infrastructure, and Interest on the Debt, just to name a few of our economic responsibilities?”

They almost always say they don’t know. I push them a little bit. How can I be so sure that they will get their Social Security and Medicare benefits? How will we pay interest on our debt? Where will we get the money for defense?

I finally ask them, “Won’t they just print the money?”

If they print money to create the revenues they need to provide benefits and services, that will have a devastating effect on savings and investments, and particularly on people’s retirement, unless they are prepared.

I ask if they would like to not have to worry about taxes, loss of benefits, inflation, or volatility. Rather than worry about them, would they like to position themselves to take advantage of these challenges. I ask if that sounds like a better strategy than the one they are using now.

So then, I ask when they would want to get started: now or after the next downturn? They always say “now” and then they always take action.

Use a presentation like this to inspire your prospects and clients to take action and your career will find success.

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