Have you noticed you are getting more questions about rollovers and Social Security?
According to a Pew Research study, four times as many baby boomers retired between February and September of 2020 than the same period in 2019. That’s 1.1 million baby boomers who retired last year. Only 250,000 boomers retired the year before. To further underscore this shift, a McKinsey study tells us there was a 350% increase in “money in motion” last year.
The long-awaited baby boom retirement wave is now officially underway. How you answer their first two questions as they prepare for retirement, namely on Social Security filing and rollovers, will determine where they will get their advice and where they consolidate their money.
All The Advice And Products Look The Same And Are Delivered In A Language Many Don’t Understand
Studies show investors consolidate assets as they get closer to retirement, primarily for administrative reasons. And as someone who hangs out with this cohort, I know they are unsure of who or where to turn. All the advice and products look the same and are delivered in a language most don’t understand.
But they are quite clear they cannot make any mistakes. This is it—no more paychecks. You would be wise to think of how you answer their initial questions on rollovers and Social Security as an audition as they make the most important financial decisions that will impact the rest of their lives. The key is to demonstrate real and lasting value.
Once They See The Dollar Benefit Of Smart Social Security Filing, They Ask What To Do Next
The first audition question we hear from the 90,000 advisors we work with is on Social Security—when and how should I file? Because the government provides an 8% increase per year in benefits between the ages of 62 and 70, investors who have the means are almost always better off waiting to start Social Security benefits.
Our advisors report that once they show the dollar benefit of waiting and how to file given different spousal scenarios, the investor feels relief and some certainty about what to do. And then they ask what to do next.
‘Why Should I Give My Rollover To You Rather Than All The Other People I’m Talking To?’
The next audition question is typically, “what should I do with my rollover?” The thought bubble overhead—“why should I give my rollover to you rather than all the other people I’m talking to?”
Those advisors who can quantify the financial benefits of a smart Social Security filing strategy and can do the same by combining taxable assets with rollovers tend to win the asset consolidation game. The combination of a rollover with taxable assets can improve asset location and financial outcomes by as much as 33%, according to an EY study.
They See How Much Bigger Their Nest Egg Will Be In Dollars Due To Tax And Cost Savings
The idea you can win on superior service, investment acumen and because you care are no longer sufficient reasons why they will turn their money over to you.