Updated Tuesday, July 29, 2014 as of 4:49 AM ET
Blogs - The Product Guru
Golden Years or Fool’s Gold?
Bank Investment Consultant
Thursday, January 6, 2011
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In case we needed yet another reminder about the general lack of preparedness for retirement, a new study from the Society of Actuaries shows a grim reality. It concludes that nearly half (48%) of baby boomers have no financial plans in place in case they live longer than expected.

Also, not surprisingly 71% of the respondents in the survey said they plan to claim Social Security benefits before the age of 70. People can choose when to tap Social Security, but they generally get more if they wait longer. And the Society of Actuaries emphasizes the importance of waiting as long as possible in order to secure more guaranteed lifetime income in retirement and to help hedge against outliving assets. All things considered, many people on the brink of retirement are not ready for their golden years. “With the challenges in the housing and financial markets over the past few years, coupled with the fact that people are living longer, many baby boomers are finding themselves unprepared to maintain their lifestyle in retirement,” said Anna Rappaport, president of Anna Rappaport Consulting, in a press release about the survey. The Society of Actuaries survey was based on online responses from 1,006 individuals ages 45 to 70. The group is currently holding a “Living to 100” symposium in Orlando.

I’ve written on the issue of financial literacy and general preparedness in this column before. A few weeks ago, FINRA launched a web tool that illustrates the lack of financial knowledge in the U.S. (Two quick tidbits from that tool: 20% of all American households spent more than their incomes over the past year; and 62% do not comparison shop when looking for credit cards.)

But the new study from the Society of Actuaries can be viewed as having a silver lining, at least from the advisor’s perspective. There is an entire client base out there in need of financial help. And it’s not just the 48% that has no plans. It’s also the 20% that plans to buy an annuity or similar product; or the 19% that plans to buy long-term care insurance; or the 22% that plans to seek planning assistance from a professional.

These are people who recognize that they need help, and have at least vague ideas as to what they want. Indeed, there are annuities and some life insurance policies that could offer some of the income these people need (provided they can afford it). But advisors just need to step up their prospecting in order to find them.

One idea that came out of our most recent “retirement roundtable” last year was the notion that the industry already has all the financial products it needs. Any situation can be handled with the products available, most of our panelists agreed, as long as someone puts them together the right way.

So you have the products necessary to help this potential client base, and they definitely have a need for someone to help them. Now one of you needs to find the other.

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