As retirement nears, it's more important than ever to make sure your clients are on track financially. But, how do you help them when they’re not?
A recent study by the Society of Actuaries found that about half of pre-retirees (51%) say their savings are behind schedule.1 How much money will they need to live the retirement they want? Of course, the answer is different for each client, but there are steps everyone can take to help close their savings gap and secure the retirement they have planned. Here are three strategies to help your clients in need of an income boost:
1. Move money into protected income
The first step in closing the retirement savings gap is to assure that extra funds are positioned to work toward client goals. Review budgets, and find places where they can save more. Evaluate portfolios to uncover possible idle assets. Consider optimizing these extra funds with an annuity, which can add protected monthly income to your clients’ retirement income strategy and help them feel more prepared for retirement.
If your client owns an annuity, they’ve already taken this important step to help ensure a more positive retirement outcome. Making additional deposits now can increase the amount of income they'll receive in the future, strengthening their income plan.
2. Diversify retirement income sources
As clients consider how to replace their paycheck in retirement, they look to you to help them manage uncertainty and make a plan to live comfortably. For those clients who will rely on their investments for a portion of their income, a market decline could put significant strain on their portfolio.
By diversifying income strategies to include an annuity with optional benefits (for an additional cost), you can provide clients with a source of income that’s protected from market losses alongside opportunities for growth to help them keep up with a long retirement. This balance can help them feel more confident about facing some of the challenges that may come their way.
3. Combine consistency and discipline with DCA
One of the ways to help clients ease into the market is through dollar cost averaging (DCA). Also, using a DCA strategy can be especially effective within a client’s annuity because it gives the opportunity to invest in underlying investment options on a regular basis, while locking in guaranteed interest payments via a living benefit rider as they invest over a set period of time.
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 .
For more information on helping clients close their retirement savings gap for more certain income later, contact your Lincoln representative. And don’t forget to follow us on LinkedIn and Twitter for more protected income planning tips.
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.
1Society of Actuaries, “Risks and Process of Retirement Survey,” 2017
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.