InsuranceNewsNet Magazine January 2011 : Page 52
MDRT INSIGHTS | GREGORY B. GAGNE Pave the Road Ahead With an Income for Life revolving debts. Between the stimulus, provide you with the information you the “bailout” and the quantitative easing, can use to help your clients. our country faces the real possibility of Fourth, clients who successfully estab-inflation due to the influx of money into lish the buffer account, pay off variable our financial system. This may result in rate debts and secure a fixed-income significant interest rate increases on stream should then construct a well-variable rate loans. balanced, diversified portfolio for their Third, make sure your clients have long-term retirement assets in order to sufficient guaranteed income every fend off inflationary pressure over time. month. Many older retirees enjoy If your clients have a reduced reliance defined benefit pension plans, but for on the retirement account for their basic “newly” retired clients the defined bene-living standards, they can focus on long-fits have been replaced with defined con-term goals and objectives knowing the tribution plans. Review Social Security short term is covered. benefits and determine how and when these Our ability as advisors to have an benefits should begin. It may be more advan-impact, give direction and protect tageous to delay the retirement income has never been start of benefits than to take them at age 62. For as great as it is today. example, each year that clients delay their ben-efits they receive a guaranteed 8 percent Establishing your clients’ retirement increase on the monthly benefit check. If plans around these basic principles will they delay receiving benefits until age 66, enable them to worry less during diffi-they will collect 32 percent more for life cult economic periods. Building a solid and enjoy the possibility of cost-of-liv-safety net and a steady stream of retire-ing increases! For clients who are look-ment income creates the opportunity ing to retire early and are considering to take advantage of market swings and benefits at age 62, discuss the feasibility rebalance portfolio assets to capture the of “building an income bridge” for the eventual rebounds. Guide your clients years prior to reaching “normal” retire-to “time in the market” not “timing the ment age. This can be done via portfo-market” by providing a steady stream of lio distributions, savings or an immedi-income, and they will spend more time ate annuity. enjoying and a lot less time worrying If Social Security and pension are about their finances. insufficient to cover the fixed expenses, augment the income via immediate Gregory B. Gagne , ChFC, is an 11-year MDRT member with four Court annuities and variable annuities with of the Table and two Top of the Table guaranteed benefits. More information honors. He is the owner of Affinity about these techniques can be found by Investment Group, LLC, in Exeter, N.H., and is past president of NAIFA visiting the Million Dollar Round Table’s New Hampshire. For additional website at www.MDRT.org. There are information, Gagne can be reached numerous resources just a click away to at Gregory.Gagne@innfeedback.com. O ur retired clients and those planning to retire soon are facing some of the most chal-lenging planning decisions of their life-time. Our ability as advisors to have an impact, give direction and protect retire-ment income has never been as great as it is today. Following are four methods to help protect your clients from whatever the future may bring so that they can bet-ter enjoy a retirement free of financial worry. First, build a solid buffer account. Do your clients hold 12 to 24 months of their fixed expenses in a cash account for emergencies or opportunities? Guard your clients against liquidating a port-folio in order to meet unanticipated expenditures during a severe downturn. If you have not helped your clients build a safety net of cash assets, consider help-ing them add this essential ingredient to their overall financial plan. We all know interest rates are virtually nonexistent and our clients may be quick to point out that fact. Remind them that it is not “what you make, but what you keep” that will count in the long run. Second, if your clients have debts, liq-uidate them! This is especially impor-tant if they have any variable loans such as home equity credit lines or unsecured 52 InsuranceNewsNet Magazine January 2011 The Million Dollar Round Table is the premier association of the world’s most successful life insurance and financial services professionals.