Mike McGlothlin, ChFC®, CLU®, CFP®
Are your clients relying on Social Security to fund their retirement? If you answered yes, you’re not alone. In fact, for 61% of us, the majority of our retirement income will come from Social Security.
The trouble with that strategy is that Social Security is set to decrease by 24% by the year 2034. With the pandemic and current economic downturn, it could happen even quicker. So, if your clients fit into that majority, it’s time to consider options that will protect their retirement despite this decrease.
Driving a car, or a career, requires focus. But how do you know what to focus on? In both cases, there’s not a single answer. You must be focused on your destination, of course, but also be watching for signs along the road. I believe that you need to focus simultaneously on short-term, intermediate and long-term goals all at once. And while it does require concentration, it’s not as impossible as it sounds.
When I was learning to drive a car, either my mom or my dad was always in the passenger seat reminding me to scan the horizon. They taught me to focus on intermediate distance — what was coming up ahead a few miles —but to also pay attention to what was happening close to the car in case something jumped out at the last second. And, of course, I needed to make sure I was making the proper turns to reach my destination — my long-term goal.
Focusing on short-term, intermediate and long-term goals also applies to retirement income planning.
It’s too important an issue to ignore when discussing income retirement plans with your clients. And, depending on where your clients live, I want to share a possible solution. It’s an annuity that addresses the unknowns of Social Security.
There’s a lot going on in today’s market. We’re experiencing short-term volatility, largely fueled by the upcoming election. Intermediate problems are the result of the federal government announcing that they’re not planning to raise rates until 2024. It’s extremely difficult to generate income yield in a low-interest-rate environment. And finally, Social Security is at a risk for a reduction sometime between 2031 and 2035, depending upon where you think that the impact of the economic downturn will hit.
So, how do you make sure that you’re focusing in on three things? Start by planning with all three — short-term, intermediate and long-term — concerns in mind. Just as when you’re driving a car, you should be scanning for all those varying concerns and preparing solutions for your client that address them. And most importantly, you need to be guided by the question: “How can I create a legacy for that next generation so that my client doesn’t run out of money?” And, while doing that, how can you take the risk of Social Security off the table for all your clients — not just the wealthy ones? Because the impact of reduced Social Security could be 24% or more.
Planning successfully for your current clients will help you reach your long-term goal of securing the next generation. It’s by far the least expensive client acquisition and client retention strategy available. If you’re looking for ways to take your business to the next level, make your business a High Performing Practice and learn how to behave, act and think differently to successfully navigate the greatest transition from the workforce to retirement I encourage you to reach out to our sales desk at (800) 589-3000.
We can help you take your business to the next level.
Don’t ignore short-term and intermediate goals. They are essential to hitting the long-term goals of successful retirement and satisfied clients.