How to Flip Your Strategy from Accumulation to Income


Winning sometimes requires looking at alternatives. That doesn’t mean you win with illegal actions or without integrity. Instead, it means attacking a challenge differently than you normally would. You do so because your opponent is unique and the consequences of losing are high.  


On the Offense

In 1984, I had the privilege of seeing one of the greatest minds in basketball, Coach Bob Knight, prepare for a regional semi-final game against the No. 1 team in the country and the defending national champions. The opponent, the University of North Carolina, played with a half-court trapping defense that had been a staple of their legendary coach, Dean Smith. Their team consisted of players that many college basketball fans recognize: Brad Daugherty, Matt Doherty, Sam Perkins and a guard by the name of Michael Jordan. (He was a great player in college as much as he was in the NBA.) 


Losing this game would mean Indiana’s season would come to an end and there would be no chance at a regional or national title. So, we had to look at this mighty opponent differently in order to have success. 


As a student manager, during the week of preparation, I took several messages to Coach Knight. He sought out the advice from basketball icons like Henry Iba and Pete Newell. We played a motion offense and typically had our guards bring the ball up the court. We started four freshmen that year and, with Carolina’s press so disruptive, our young team might have folded under the pressure. So, we needed to look at alternatives.  


Coach Knight practiced with our guards positioned in the corner so we had an outlet to relieve ourselves of the pressure. Additionally, we experimented with having our big men bring the ball up the court while having our smaller guards in the low post. Essentially, we flipped the court on the opposing team and took our biggest risk – their half court trapping defense – off the table.  


An Alternate Defense

In retirement, our clients face several risks, and the consequences are just as devastating – you don’t get a second chance at planning a retirement. Therefore, you need to take risks off the table by thinking alternatively. Today’s economic environment presents several ways to look at alternatives to improve the client’s retirement.  


  • We have historically low interest rates, making it more difficult to retire through capital preservation
  • Most people believe over the next three to five years we will see increasing interest rates that might depreciate the bond values that some many look to for safety
  • Our government continues to manipulate monetary policy, making it uncertain how bond markets will react to “uncensored” interest rate movements
  • We continue to be part of an extended bull run following the financial crisis that many believe is running out of steam


So, it’s more important than ever to look at alternatives, especially for those invested in bonds. Fixed indexed annuities can provide alternative income streams, protection from markets risks, and tax deferral. I encourage everyone to look at alternatives and share them with your clients. 


Winning Strategy

Retirement is the most complex problem your clients will ask you to solve. You can’t win the game with the same strategy you used during accumulation. Instead, you have to consider alternatives to better your client’s probability of success during retirement.  


About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of retirement at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”

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