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The skinny on retirement planning from two top producers: Part 1

Charles K. Hirsch

For many years now, retirement planning has been a topic explored by the consumer-oriented financial press. Whether you pick up a weekly newsmagazine, a daily paper, or take a quick look at a news website, you’re almost certain to find a discussion – or an alarming alert – about the challenges of retiring today.

These reports used to be considered newsworthy because of the sheer number of people who were quickly approaching retirement age. Now days – since 2008 or so – the stories are more pertinent because the economic downturn has proved to people that many of us are simply unprepared for a life without a steady work-related income.

But the consumer financial press cannot be counted on to give the real picture of today’s retirement planning challenges and opportunities. I do believe that the advisors who are specialists in this market can, though, and that’s why I recently discussed retirement planning with two of the best producers in the business: Gregory B. Gagne, ChFC, managing member of Affinity Investment Group, LLC, in Exeter, N.H., and Wayne D. Minich, CLU, ChFC, president of Applied Financial Concepts, Inc., and Wayne D. Minich & Co., Inc., in Richfield, Ohio.


‘Study the issues retirees face and learn about distribution planning’

I began the discussion by asking both gentlemen for a little background on how they came to focus so much of their professional attention on the retirement planning area, and what advice might they give a producer who is looking to expand his or her market to include retirement planning as a specialty.

Mr. Gagne told me, “I made the decision to specialize back in 1996 after seeking guidance from Million Dollar Round Table (MDRT) members who were doing very well. They advised me that, in order to really grow, I should stop being all things to all people and pick a focus. I looked over my book of business, reviewed the cases I truly had the most fun writing, and I discovered that those I most enjoyed also were those that seemed to produce the largest revenues. The result of that analysis was the decision to focus on working in the retirement planning area.”

Mr. Gagne continued, “The advice I would give to any producer who wants to get into this market is to study the issues that retirees face and learn about distribution planning. Most advisors are good at helping clients accumulate, but very few know how to help them ‘decumulate’ should they live too long, die too soon, or need long-term care services along the way. With more than 10,000 people turning 60 every day, the need is huge and there are not enough advisors available to service the growing demand. This places any advisor in what I call the ‘sweet spot’ for decades to come.”

For Mr. Minich, the focus on retirement planning began with the broader focus on his target clients – business owners. “From the early years of my career, I have focused on doing financial planning for business owners,” he told me. “Part of the process involves projecting the amount of income the client will need, adjusted for inflation, throughout retirement. The client’s income needs and longevity assumptions enable us to calculate, when combined with anticipated income streams such as Social Security, the estimated amount the client will need to accumulate to generate the desired retirement income. This provides the ‘bull’s-eye’ of the asset accumulation target for which we are aiming. A retirement plan or plans usually are, for the business owner, the most tax-efficient and effective way of accumulating the needed assets. I suggest that learning a process to help the business owner accumulate the needed assets is one very effective method for including retirement planning in one’s practice.”

Mr. Minich continued, “A key component is learning about the implementation of customized retirement plan options such as cross-tested profit-sharing plans and cash balance pensions. These tools are methods by which a practitioner may differentiate his or her approach from others competing for business.”

• Editor’s Note: Part II of this interview will be posted on Thursday, Aug. 14, and will include responses to questions including: how they combat media annuity criticism in their own retirement planning discussions; how to handle the issue of Social Security benefits in retirement planning discussions; and their primary concerns and reasons for optimism in the retirement planning market.

‘I show them how they will run out of money’

In light of both of their long experience, and the amount of publicity retirement planning gets, I asked them whether their clients and prospects truly were aware of how much money they realistically will need for a secure retirement. And if not, I asked, what techniques do they use to educate their clients on that issue and motivate them to plan appropriately?

According to Mr. Minich, “They may not be fully aware, before engaging us to do their planning. All of our work begins with a financial plan as the foundation for what the client will do when moving forward with our firm. Part of that process is the projection of the income they will need at retirement, based upon their present lifestyle, coupled with a projected amount they will need to accumulate to accomplish their desired income. After that target has been established, the task is to accumulate the needed amount.”

Similarly, Mr. Gagne differentiates between clients and prospects. He told me, “My clients are, but prospects are not. Many have waited too long to start planning their exit strategy, saved too little, and expect too much. This takes a lot of educating about how to realistically manage their expectations and outline what actions they can take even late in the game to execute a transition plan from working to either not working or working on a part-time basis.

“I show them how they will run out of money. For example, I had a meeting recently with a prospective client who has a goal of retiring at age 58. If he does this, he will be out of money before age 70 based on his living standard and cash flow needs. This meeting was a wakeup call. If he does delay the retirement decision to age 66, he will be fine through age 100, assuming just a 4% return on investment (ROI).”

Coming Thursday in Part II

  • ‘Guaranteed income needs to be a portion of the overall plan’
  • ‘Social Security is the best annuity out there’
  • ‘The largest issue we face…’

Gregory B. Gagne, ChFC, is the founder and managing member of Affinity Investment Group, LLC, an investment advisory firm based in Exeter, N.H., offering wealth management and distribution planning services for retirees or those planning to retire. He is past President of NAIFA-New Hampshire, and was awarded the Distinguished Financial Advisor of the Year award from NAIFA-N.H. in 2008. Greg is a 15-year qualifier for MDRT, with eight Court of the Table and six Top of the Table qualifications.

Wayne D. Minich, CLU, ChFC, is the founder of Applied Financial Concepts, Inc., and Wayne D. Minich & Co., Inc., in Richfield, Ohio, and has been in the financial planning industry for 43 years. He has been an active Million Dollar Round Table (MDRT) member for 39 years, and has earned 15 Court of the Table and five Top of the Table qualifications. Wayne is also a member of the Forum 400, Cleveland Estate Planning Council, Richfield Chamber of Commerce, Business Enterprise Institute’s Network of Exit Planning Professionals, and National and Cleveland Chapters of Society of Financial Service Professionals.

Charles K. Hirsch, CLU, is contributing editor of Insurance Forums. He is also the president of Hirsch Communications Consulting, LLC, a communications consulting operation in Florissant, Mo. For many years, Chuck was the editor and publisher of Life Insurance Selling magazine and wrote the monthly column, What’s Going On in the Life Insurance Business. From 1999 to 2008, he was the publisher of several of the leading industry magazines in the life insurance, property/casualty insurance, and mortgage markets. These days, Chuck’s firm specializes in the development and execution of many kinds of communication strategies, particularly in the financial services business.



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