Three overlooked retirement risks


The American College’s Retirement Income Certified Professional (RICP)® curriculum includes a list of 27 risks that retirees face.  Here are three risks that are incredibly important but often overlooked.

1. Forced retirement risk

Your client plans to work until age 66 in order to retire with full Social Security benefits. Unfortunately, a health, family or employment issue forces them to retire at 61. Are they financially prepared to support the lifestyle to which they've grown accustomed?

This happens more often than you would think. According to a recent Gallup® poll, the average American retirement age is 62.

2. Loss of spouse risk

What happens to the family income upon the death of a spouse?  It is imperative to evaluate survivor benefits in pensions and Social Security.

What may feel like a comfortable retirement can become downright terrifying upon the death of a spouse. Income sources are often halved, yet lifestyle costs for the widow(er) remain very similar to those of a couple. The last thing they need to be concerned with is how to replace lost income after the death of their spouse.

3. Legacy risk

Retirement income planning is all about balance. Balancing competing interests is the name of the game.

Think of your financially successful clients and prospects who want to maximize both their retirement income and their legacy assets while minimizing market risk. For them, using income guarantees can result in a more efficient allocation for income (generating the highest guaranteed income with the least amount of assets) allowing the remaining assets to be managed to achieve their legacy goals.

If your clients don’t have the benefit of a crystal ball, shifting these uncontrollable significant risks to an insurance solution is sound advice. We can help you develop a plan to address these risks.


Give us a call, tell us about your client’s situation and let us go to work for you.

Resetting Expectations



Today's advisors continue to be bombarded with negative headlines about fixed income solutions. The media harps on the low interest rate environment to the point that advisors and clients fear making a mistake on timing, resulting in lost opportunity. Reality is, standing on the sidelines is the true lost opportunity. 

What needs to happen for the industry to grasp that we are closer to normal long-term interest rates than we are to low ones? The historical average during the entire 20th century was 4.9 percent. Looking at the past 50 years, the average on the first 25 years was 3.3 percent, and it rifled upward during the late ’70s and early ’80s. The average for the second half of the period averaged only 6.7 percent – double the average in a period that included 15 percent interest and inflation rates. Today, long bonds have yields around 3.5 percent. Clearly, we are closer to normal than many would like us to believe. 

It's time to reset expectations. Today's interest rates remain in line with the amount of risk taken. For clients who want zero risk, fixed annuities and fixed indexed annuities are a great alternative. And, in the unlikely event of skyrocketing rates in the next year, annuities provide a shelter for price depreciation. Let's have meaningful conversations with our clients about the virtue of annuities in our "new normal."

Awareness leads to growth



Annuity Awareness should be an ongoing initiative for our industry – not just a focus in June. I read article after article about the complexities of annuities; however, when we explain to clients that annuities provide guarantees, protection from outliving their income and tax advantages, they easily understand. Advisors who engage their clients in annuity discussions get ahead of the game for several reasons. 

  • An American turns 60 every 7.5 seconds. Think about that statistic for a moment … and, think about the nearly unlimited pool of prospects who are looking for retirement income.

  • The ratio of individuals under age 65 to those above 65 has reduced to 2.9. That means a lot less people are paying into Social Security, which places an undo amount of pressure on our entitlement programs. The need for self-reliance in America has never been greater, and at the same time, our average retirement account balances have never been lower.

  • Third, due to a variety of cultural, lifestyle and medical improvements, Baby Boomers will live 20-30 years after retirement. That is in stark contrast to their parents, who typically lived for only 10-15 years. Given longer life expectancies, discussions about inflation have never been more important. Today’s retirement conversations gain momentum with talk of stable income and growth on a depreciating asset.

In our industry, we spend a lot of time talking about the interest rate environment, regulation, compliance and product training. Regardless of the challenges and perceived impediments, the future holds unlimited possibilities. Americans need our services and products at unprecedented levels. It's up to us to help them. 

Make yourself aware of all the opportunities. Once you consider them, you can't help but want to talk about using annuities to positively change a person's retirement.

National Annuity Awareness Month


National Annuity Awareness Month spotlights the need to for a financial vehicle that provides abundant client value and creates predictable income, but comes at the highest level of scrutiny. In June, we need to focus on the real benefits of annuities and maximizing those benefits for our clients.

Tax-deferred growth: With increased tax rates as high as 39.6 percent, it has never been more important to protect the growth of non-qualified savings. At a 3 percent growth factor, a $100,000 account would grow to $134,391 over 10 years. In a taxable account, taxes would account for $14,719. That’s $1,400 per year, which will make a significant difference for many Americans. 

Alternative income: The average IRA balance at the end of 2012 surged to $81,100, according to a Fidelity Investments analysis of nearly 7 million IRA accounts. For today’s near retiree, the reality is that they do not have enough assets to live a comfortable retirement on interest only. We must look at vehicles that provide guaranteed income for basic living expenses. Annuities are the only vehicle that can provide lifetime income and longevity credits to increase payouts. 

Peace of mind: More people are afraid of running out of money than they are of public speaking or dying in a plane crash. The year a person runs out of money is not their worst fear, however. It’s the months and years leading up to a zero balance that they fear the most. Retirees and their families experience a lot of anxiety knowing their income will diminish and their lifestyle will dramatically change. With a guaranteed stream of income, annuities can provide peace of mind like no other vehicle. 

Safety: Annuities continue to be backed by an industry that has not defaulted on its clients. Even through the Great Depression, clients remained whole with the protections of our industry and its state insurance protection. In turbulent times, and uncertainty with interest rates, annuities continue to provide more value to clients than comparable no-risk investments. 

Many public pundits continue to question the value of annuities, focusing on cost. Instead, our industry needs to turn the conversation to value. We need to focus on delivering solutions to clients needing guaranteed income, safe investments and tax-efficient distributions. Annuities are a great solution for many Americans.

Take client gains off the table


How many of your clients have asked if you think this market is due for a correction? Who is more concerned about it – your clients or you? I’m not saying that the party is over on Wall Street, but I do know the bears haven’t eaten in a long time.

My point is this: Every day that we let go by without taking some part of our clients’ gains off the table, the greater we are multiplying their risk. Yes, multiplying! Adding risk occurs when we change their asset allocation to a more aggressive mix. Multiplying risk occurs when we stack or compound risk factors, such as a market that hasn’t retraced gains in nearly five years with P/E’s nearing the range of the 1987 crash, coupled to an economy with the lowest employment rate in 39 years and a bond market that mirrors Japan’s 20 years ago. 

I’m sure some of you will accuse me of fear mongering. That’s what those FIA guys do, right? Except I also wholesale three VA’s and a mutual fund family, and I have a Series 24.  

So how do I suggest we proceed? I thought you’d never ask! To help take your clients’ gains off the table, Ash Brokerage has four distinctly different alternatives, one of which looks and feels a lot like a balanced fund with no downside risk. Please call us for ideas to help your clients avoid being bitten by the hungry bears.