Clients Should Define A Winning Retirement
Just as Beane defined winning attributes in baseball, clients should define their successful retirement. Many will say they just want enough money to last their whole lifetime, remain financially independent or live in their current home indefinitely. Extras that financial professionals often focus on like travel or leaving money to heirs only become important to most clients after they’re confident their most basic needs are met.
By simply asking clients what keeps them up at night, you will hear responses that are insightful and wide-ranging. These may include fears about health, longevity or medical coverage and uncertainty about social security, tax increases or reductions in purchasing power. Or they could involve worries about losing a spouse or the ability to afford to care for a family member who becomes incapacitated emotionally or physically. It’s unaddressed concerns like these that lead 42% of multimillionaires to live in retirement spending far less than they can reasonably afford[12].
You may consider integrating clients’ retirement concerns into your data-gathering by providing them with a Retirement Worry Inventory early on that can help them articulate concerns and inform the conversation. Identifying these at the start of planning is essential because it will illuminate what must be addressed in the planning process.
Just like baseball teams found more success when they aligned their recruiting metrics with their end goals, the retirement plan presented to a client needs to align with their definition of success.
Adopting a Moneyball approach with a plan that captures and eliminates your clients’ biggest worries can lead to better outcomes—both in your relationship and their retirement experience.
Myles Womack is vice president, advanced planning and platform distribution, at Jackson National Life Distributors LLC.
[1] April 28, 2021, Slackie Brown Sports & Culture, 2021 MLB Team Salaries
[2] October 2021, Steve the Ump, MLB Team Payrolls
[3] Oct. 20, 2021, Daily Democrat, World Series: Why Tampa Bay Rays do ‘Moneyball’ better than Oakland A’s
[4] October 2021, Goodreads, Moneyball: The Art of Winning an Unfair Game
[5] April 21, 2021, Screen Rant, Moneyball: What Happened to Billy Beane
[6] Aug. 24, 2016, University of Wisconsin Data Science, The Story of Moneyball Proves Importance of Both Big Data and Big Ideas
[7] Aug. 24, 2016, University of Wisconsin Data Science, The Story of Moneyball Proves Importance of Both Big Data and Big Ideas
[8] Aug. 24, 2016, University of Wisconsin Data Science, The Story of Moneyball Proves Importance of Both Big Data and Big Ideas
[9] Sept. 18, 2021, Kiplinger, How Exactly Do You Stress-Test Your Financial Plan?
[10] April 3, 2018, EBRI, Employee Benefit Research Institute, Sudipto Banerjee, "Asset Decumulation or Asset Preservation? What Guides Retirement Spending?"
[11] March 1, 2012, Kitces.com, Is The Retirement Plan With The Lowest “Risk of Failure” Really The Best Choice?
[12] 2018, LIMRA, Secure Retirement Institute, Jafor Iqbal, The Retirement Income Reference Book, Fourth Edition