Are You Ready for the Baby Boomers as They Enter Their 70s?

by Certified Coach Alissa Gauger, MBA

Did you know that the first Baby Boomer turned age 70 on January 1, 2016, according to U.S. News & World Report? As a financial advisor, you know that there are many important steps for your clients to take in their 70s such as signing up for social security. And, after decades of saving for retirement, they now need to figure out how to actually retire and use their money to fund it!

This is where you come in. According to Ed Slott, author and public speaker, "they want hand holding." Slott was a General Session speaker at Northwestern Mutual's Eastern Regional who made a compelling case for using permanent insurance as a tool for clients beginning in their 60s (if not much sooner!).

Can you be the hand-holder? Are you fully educated about this opportunity? Are YOU sold on permanent insurance? If you answered no to any of these questions, now's your chance to make a big impact in your clients' lives by examining your belief system as well as your base of knowledge to make sure you're ready for the Boomer generation.

With the United States stock market "off to its worst start to a year ever" in 2016, according to USA Today, Slott said the timing could not be better to talk about permanent life insurance with your clients. The shaky start makes Boomers (and anyone invested in the market) feel a loss of control and may make them more open to a discussion about using whole life as a retirement tool in their portfolios.

"You have to really explain the benefit," he emphasized, explaining that an IRA or 401(k) is a problem in retirement because it's a diminishing asset with a tax liability tied to it. Instead of positioning whole life as a death benefit, talk about it like "moving money from one pocket to another," said Slott.

Slott said he hears clients ask, "What's in it for me? I pay all this money and drop dead and other people get the money." He explained that your clients will need your help to see permanent insurance in a new light. You can reposition retirement savings into a benefit instead of an expense if permanent insurance is an option. While there is a death benefit, Slott emphasized educating clients on all of the other ways permanent insurance is a very appropriate part of overall tax planning.

For example, your client's IRA or 401(k) is an expense with a lot of unknowns. Since there is a tax exemption for life insurance and no penalty for withdrawals in your 60s, Slott said to help your clients by setting up a system of withdrawals from their IRA in their 60s. He advised the audience to coach clients to pay the taxes now--while the amount is known and can be planned for since taxes will likely continue to increase over time, not decrease. Putting those dollars in life insurance provides the ability for your client to take withdrawals on their own timeline (instead of the required distributions which may increase their taxes) instead of having that mandated to them.

Some of my coaching clients have personal objections to selling whole life. If you are not convinced that this tool has a place, your clients will not see it either. Work on your own "objections" to selling this product if you have head trash getting in your way of using this tool when it is right for your clients. Consider investing in it yourself, if you haven't already, since you are in a "live it to give it" profession.

Coaching Tip Running a financial practice is a lot of work! Do you take enough time to educate yourself about financial and market trends and to learn what your clients need from you? If not, you're in the same boat as many well-intentioned advisors who are swamped working IN the business and not ON the business. How can you make time to keep your skills and knowledge fresh? Start by setting your intention and writing down the goals that will get you there. See if you can break it down to the daily actions it will take to bring your intention to life.