The opening paragraphs of the Social Security Administration’s “Social Security Handbook,” a guide to the benefits program, state plainly: “The Social Security programs are so complex it is impossible to include information [in the handbook] about every topic.” This came from a recent article in the Wall Street Journal and stopped us dead in our tracks.
Is this the equivalent of the handbook for an automatic rifle leaving out the chapter on engaging the safety switch? “This weapon is so complex that it is impossible to include information on every feature. However, be advised that you may shoot out someone’s eye.” All of you who religiously watch “A Christmas Story” just had a nice chuckle.
Licensed agents have an amazing opportunity to help clients with the ins and outs of Social Security through the use of Social Security Seminars. We have developed a solid process to help insurance agents easily conduct thoughtful, detailed sessions with those close to retirement age.
By 2030 it is estimated one in five Americans will be 65 or older. And, that ratio will continue on for another 20 years or so because the generation behind the Boomers—Generation X—is almost as large as the Boomers.
That same Wall Street Journal article helped bring into focus what drives consumers crazy. The article had a great lead-in:
“Imagine that you’re about to accept a new job, and it’s time to talk salary. You sit down with your boss, who begins as follows:
“Actually, our payroll system is impossibly complicated. You can pick from dozens of different ways to be paid and hundreds of different start dates, and each will produce a different salary. We offer some guidance, but we’re short-handed. As such, deciding when and how to collect a paycheck is essentially up to you.
“So…what would you like to do?”
Welcome to Social Security. This is exactly what faces your clients approaching age 62 and the opportunity for agents to use social security seminars as a way to provide counsel and options to clients to help de-stress this stressful decision process. We came away with three key points for agents from this article, all of which lead to you making Social Security part of your A game:
- Social Security Administration is not a financial advisor (Opportunity #1 for agents). The agency provides loads of information about benefits. But a comprehensive talk about the nuances of Social Security and your financial future? That’s not going to happen. It isn’t the Social Security Administration’s job to know about your client’s household budget, health, savings, life insurance, and plans to work in retirement. In short, it knows nothing about all the variables that should go into a decision about filing for benefits. Agents can learn the ins and outs of Social Security to expand the discussion with clients.
- Social Security Administration stretched thin (Opportunity #2 for agents). The agency has lost 11,000 employees in the past three years and by 2022 about 60% of its supervisors will be eligible to retire. So, not only are the folks there not charged with counseling clients on this complex decision, there are fewer folks to help answer the basic questions. Who would clients rather talk to: someone they don’t know that now they can’t reach, or you?
- Delaying Social Security can make good tax sense (Opportunity #3 for agents). Many retirees don’t consider the impact of their withdrawal strategy on how their Social Security is taxed. Many clients take Social Security benefits, typically at age 62, to help pay the bills. But that advice ignores the possible tax benefits associated with following the opposite course: accelerating withdrawals from savings early in retirement to hold off on claiming Social Security. This issue is a complex decision and provides agents the opportunity to discuss a broad range of insurance-based fixed annuity and tax-free retirement options that complement their decision on when to take Social Security benefits.
Stay tuned to this space as we will continue to hammer away at the opportunities staring us all in the face. If you’d like to learn more about our new Social Security seminars please call Drew.
NOTE: In last week’s blog we wrote about when to enroll in Social Security and used these words: “There are no do-overs with Social Security. A bad decision will impact a client for the rest of their life.” Our buddy and Social Security guru Mike Granbois gently corrected us that in a few situations clients may have wiggle room. In his words: “A bad decision can impact a client for the rest of their life.”
Product of the week: Better Alternative Life from Armed Forces Benefit Association
Armed Forces Benefit Association (AFBA) has been supporting active and retired military since 1947. Founded in the basement of the Pentagon, the AFBA is underwritten by 5Star Life Insurance Company and has a strong line of products.
The Better Alternative product provides life insurance for active duty military and Department of Defense (DOD) contractors, domestic and international. Deployed troops and contractors can now qualify for up to $400,000 of life insurance regardless of their occupation or geographic location. This product is an alternative level of coverage above and beyond what the military and DOD provide. The Better Alternative plan provides life insurance for Army, Marines, Navy, National Guard, Police, Firefighter, DOD, Coast Guard, and others.
Contact us today if you are interested in becoming a broker with AFBA or would like more information on the Better Alternative life insurance plan.
- Issue ages: 18-59
- $50,000 – $400,000
- No medical exams
- Unisex rates
- No combat exclusions
- No terrorism exclusions
- No geographical exclusions
- Great for active duty military
Call 866-547-8780 and talk to Drew Gurley, ext. 102.
- Ben Newman’s new book a “success”. We strongly urge you to read our friend Ben Newman’s book: Own Your Success: The power to choose greatness and make every day victorious. Ben has had a significant impact on Redbird, providing both inspiration and coaching. Ben left Northwestern Mutual as a top producer to devote full time to his business. He’s parlayed great experience with an amazing attitude to catapult his business, whether it’s working with the Nebraska Cornhuskers or Washington Redskins football teams or with an individual agent just looking to improve. If you’d like to learn more about Ben give Drew a call.
- Head off those holiday arguments at the pass. While having nothing to do with insurance or sales, Dave Ramsey’s simple article of five ways to make the holidays pass easier and less expensively hit home with us.