This excellent article from InsuranceNewsNet outlines a process that would be familiar to readers of AnnuityAce. Our Strategy Session and phone conferences bring up these important points. It’s critical for you and for us to understand your needs so we can together chart a course for your retirement .
Here’s an extended excerpt of the article
Guiding Huddled Masses Yearning To Retire
By Steven A. Morelli
NEW YORK CITY – Imagine anxious 50-somethings holding armfuls of cash while being shouted at from all sides about what to do with the money to avoid being stranded in a bleak desert of old age.
That’s the picture of many pre-retirees in the middle market, according to Richard Weber’s presentation, The Retirement Planning Gap, New Tools of Engagement, at the LIMRA annual meeting. Weber, principal at Ethical Edge, spoke to InsuranceNewsNet about the issue before today’s workshop.
Retirees are already drawing down enormous sums, $1 trillion a year, with boomers expected to pull down much more, but with even less good advice on what to do with it. Retirees and those who hope to retire are left to the “Evangelists of Financial Misinformation” in various media, Weber said.
They also are not helped by the decreasing numbers of insurance producers and the rise of fee-only advisors who tend to give short shrift to insurance. Then add the pressure from product-centric producers, throw in a dash of blood-curdling stock market chaos and what remains is a frightened, huddled mass yearning to retire.
Now is the time for the calming voice of the retirement advisor who asks gentle questions about what clients really want for their future. These shell-shocked prospects are not ready to talk dollars and products, Weber said. They first need to reconnect with the basics.
“If you were to ask a bunch of people about what their sense of retirement planning was all about, they would immediately start talking numbers” Weber said. “They would ask – how much money should I set aside for retirement? When should I take my Social Security? Should I buy an annuity? Those are very important questions at the right time. When you’re first starting to deal with all this, ideally it’s your attitudes, uncertainties and anxieties that need to be expressed and understood.”
It’s helpful to clients and advisors to put numbers and products aside and explore first, he said. “They should be thinking about questions like, ‘What do I want to pursue? Where am I going to live? And what are my sources of funds? Not how much yet, that comes later.”
Then an assessment of risks comes. That means more than a simple understanding of risk tolerance, but an ordering of priorities.
“It’s a question of how shall I consider the various risks that stand between me and what I’d like to do,” Weber said. “You look at it in terms of risks from longevity, inflation, investment, health care, taxes and, these days, I would add public policy risk – will the programs that I thought would be there really be there?”
Only then can advisors have a real discussion about options. “When it comes time to talk about numbers, clients are prepared to deal with them and they don’t come all at once,” Weber explained.