41% of clients say that having enough money to last a lifetime is their number one goal.1 What steps can you recommend today to help them meet that goal?
Clients turn to you for guidance to help meet their financial goals during many life stages. But retirement planning is one of their biggest goals, and the prospect of living for 30 or more years without a reliable paycheck can make them feel uniquely vulnerable. As their trusted advisor, what can you do to help them feel more prepared – and to deepen and strengthen your client relationship?
You already know that 94% of Americans think it’s valuable to have a source of income in addition to Social Security. So it should be no surprise that clients who own annuities are more satisfied with their advisors’ advice.2 But did you know that almost half of clients feel they’re likely to run out of money in retirement, whether or not they work with a financial professional?3
If your client owns an annuity, they’ve already taken a critical step to help ensure a more positive retirement outcome. How can you strengthen your approach even further? A simple step you can take right now is to reach out to your clients and encourage them to consider making additional deposits to their existing annuity contracts. Here are four conversation approaches to consider.
Funnel extra funds toward future income
As I write this, the fall season is approaching. Many of your clients may have hit their payroll tax ceiling and have a bit more room in their paychecks. Others may be enjoying the freedom of not paying a tuition check as they did in past years. Instead of letting this money dissipate among a bunch of unmemorable purchases, remind clients that they can put a down payment on their future lifestyle.
If they’ve already purchased an annuity contract, making additional deposits now can increase the amount of income they'll receive in the future, strengthening their income plan.
Diversify retirement income sources
Clients over age 55 may be taking advantage of catch-up contributions to their employer-sponsored retirement plans. Yet how well do these contributions align with the larger income strategy you’ve created together? You know that diversifying clients’ income strategies with a known source of lifetime income can help clients feel more confident – and perhaps help move them out into the 50% who feel their income will last during retirement.4 Make sure they think about adding to their annuity in proportion to the other parts of their strategy.
Help manage market instability
Speculation continues about whether our current bull market will last – and for how long. Many clients still remember the pain of the 2008 market downturn. If your clients have purchased an annuity with a guaranteed lifetime income option for an additional cost, they likely take comfort from knowing they have a reliable source of income inside their portfolio. When fears of market instability arise, clients may want to control what they can and consider making additional deposits to their annuity contract.
Take advantage of dollar cost averaging
As we’ve discussed before on this blog, dollar cost averaging (DCA) is one way to help clients ease into the market. Specials are sometimes available within DCA programs that can guarantee a higher percentage of return for a limited period of time. Take a look at our client fliers to learn more about our DCA rates and a special opportunity for additional contributions to American Legacy contracts.
For more information on helping clients add to their existing annuity contracts, to learn about our latest DCA options, or for tools and support relating to lifetime income, contact your Lincoln representative. And don’t forget to follow us on LinkedIn and Twitter for regular insights and tips on income planning conversations.
Variable annuities are long-term investment products that offer a lifetime income stream, access to leading investment managers, options for guaranteed growth and income (available for an additional charge), and death benefit protection.
To decide if a variable annuity is right for you, consider that its value will fluctuate; it’s subject to investment risk and possible loss of principal; and there are costs associated such as mortality and expense, administrative and advisory fees.
All guarantees, including those for optional features, are subject to the claims-paying ability of the issuer.
1LIMRA Secure Retirement Institute. *Note: Based on 2,000 retirees and pre-retirees.
2Greenwald and Associates, “Guaranteed Lifetime Income Study,” 2016.
3Lincoln Financial Group and Hanover Research, Inc., "The Longevity Opportunity: Planning for Longer Lives as a Family,” 2015. http://newsroom.lfg.com/wealth-protection-expertise
4Lincoln Financial Group and Hanover Research, Inc., "The Longevity Opportunity: Planning for Longer Lives as a Family,” 2015. http://newsroom.lfg.com/wealth-protection-expertise
Investors are advised to consider the investment objectives, risks, and charges and expenses of the variable annuity and its underlying investment options carefully before investing. The applicable prospectuses for the variable annuity and its underlying investment options contain this and other important information. Please call 888‑868‑2583 for free prospectuses. Read them carefully before investing or sending money. Products and features are subject to state availability.
ABOUT THE AUTHOR
For more than 22 years, Christopher H. Price, JD, LLM, CLU®, ChFC®, AVP, Advanced Sales, Lincoln Financial Distributors, has helped advisors and their clients accumulate, distribute and transfer annuity assets by using a holistic approach. In 1983, he began his career as a trust officer with Sovran Bank (now Bank of America). Chris moved into financial planning, and followed that by managing an insurance agency that served some of the wealthiest families in the country. In 1994, Chris joined Delaware Investments, formerly a member of Lincoln Financial Group, where he was responsible for the product management of Delaware mutual funds and eventually Lincoln variable annuities. From 2000 to 2004, Chris used his expertise to help financial advisors and their clients with advanced case issues. In 2005, he transitioned to the Lincoln Advanced Sales team. Chris holds a BA in history from Vassar College, and law and master’s degrees from the Marshall-Wythe School of Law at the College of William & Mary.