When scheduling a client/prospect appointment, financial professionals can have The A-Team involved in the entire process as you prepare to talk about planning for retirement. You generate the illustrations for life insurance, compare multiple products for annuities, and even share some options for long-term care.

“I love it when a plan comes together” you think to yourself like Hannibal Smith lighting a cigar as your plan unfolds, but then human nature unravels these ideas during the discussion based on multiple factors – budget, timing, life events, and anything else that possibly could affect their retirement strategy.

You can’t use B.A. Barracus to muscle them toward a specific product as that’s not in their best interest. Templeton Peck’s charismatic character and “Face” can’t persuade them (again, best interest of the client/prospect). You also don’t want to bring “Howling Mad” Murdock into the equation.

That’s why you have our A-Team in your corner – the AIP Marketing Alliance team to support your life insurance, annuity, and long-term care insurance sales efforts. We’ve talked multiple times about how our experience, technology, resources, and carriers/products provide the tools designed to help you and your clients/prospects protect their retirement years against the knowns and unknowns of the world.

The hardest part is convincing your clients about the potential “enemies” looking to drain those dollars from their selected retirement planning choices. What they don’t know could impact them and their loved ones – sometimes severely – without the right retirement pieces in place. AIPMA wants to provide some “ammunition” for your conversations.

Here’s the first bullet – healthcare. A recent Yahoo!Finance article, Healthcare costs are eating into Social Security checks, shares how out-of-pocket healthcare spending in retirement is “mountains more than people plan for.” The article continues by stating how Medicare coverage and ignoring long-term care is making “retirees face sizable out-of-pocket costs for premiums, copays, and uncovered medical services.”

According to a report from the Center for Retirement at Boston College, healthcare bills consume roughly one-third of a typical retiree’s Social Security income and almost a quarter of the person’s total income. At the median, out-of-pocket (OOP) medical costs – including premiums, cost sharing, and uncovered services (excluding long-term care) – leave only 71 percent of Social Security benefits available for spending on other items.

With OOP health expenditures already eating away at retirement income, and the uncertainty from further health policy changes and Social Security drawing ever closer to trust fund depletion, it is understandable why many retirees feel that making ends meet is difficult, per the Boston College report. On top of medical spending – which most analyses treat as outside of the individual’s discretion – retirees face a substantial amount of other non-discretionary costs. Farrell and Greig (2017) find that housing expenses, taxes, and non-housing debt consume about 30 percent of retirees’ household income, leaving even less for surprise expenses and any other desired spending.

For about half of seniors, monthly Social Security benefits provide at least 50% of their income, and for about 1 in 4 seniors, it provides at least 90% of income per the Yahoo!Finance article. For 27% – 6.4 million seniors – it’s their only source of income. For women, those checks tend to be smaller. The average woman’s monthly Social Security check is roughly one-quarter less than the average man’s due in part to lower pay over their working years, time out of the workforce for caregiving, and more part-time work.

Here’s the second bullet – eating. AIPMA wants to give you some food for thought with a simple math equation that’s made the rounds through multiple insurance carriers. How much does it cost to feed yourself for a year? Take a minute to digest that question yourself.

Let’s do some simple math by budgeting $20 per day. That number could include a brand name cappuccino or breakfast sandwich, maybe a coney dog and fries for lunch, or even grocery-bought meals to round out that number for dinner.

The equation. $20 per day x 7 days = $140 per week. $140 per week x 52 weeks = $7,280 per year. $7,280 annually x 20 years = $146,600 JUST FOR MEALS. That number does not include going out to dinner/lunch meals, paying for the children/grandchildren, or picking up the tab for friends. Your clients/prospects may want to be able to choose between a filet mignon and a filet of SPAM®.

Here’s the third bullet – long-term care costs. There’s reasoning behind our upcoming March education series on positioning and discussing LTC with clients. As discussed previously in our blog and LinkedIn newsletter, a recent CNBC article pointed out how about 1 in 7 Americans could spend at least $100,000 out of pocket for long-term care annually. The average future cost of long-term care for someone turning 65 today is about $122,400 annually, per the U.S. Department of Health and Human Services and the Urban Institute.

You can read more about how long-term care is becoming more prevalent in retirement planning in that blog. There’s also still a few spots left to register for our exclusive CLTC agent virtual training course on March 25th and March 26th that specializes in opening and managing LTC conversations. Click here to register.

AIP Marketing Alliance has a lot more ammunition to help your client conversations, but let’s finish off the chamber by doing what most of your clients and prospects are doing – using Google to search “amount of money to retire by age.”

Per AIPMA’s recent Google search, general guidelines suggest having 10 to 12 times their annual income by age 67. Some factors that could affect that number are retirement age (earlier retirement requires higher multiple), lifestyle (10x to 12x goal is based on replacing 65% to 85% if pre-retirement income), location/health (higher cost of living/health expenses may require more savings), and income level.

Say you have a couple that generates $100,000 in annual revenue and decides they want to retire. The above Google search would estimate they need $1 to $1.2 million for their retirement years. Note: some “articles” have put the number around $1.7 to $2.4 million based on multiple other variables not touched upon in this article (i.e., cost-of-living adjustment, inflation, etc.).

Let’s regroup to our bullet points above of $1 million for retirement. Take 25% of that number of plain healthcare expenses (medical visits, prescriptions, Medicare deductibles, etc.) and 30% for housing/taxes/etc. Add in meals for say 10 years instead of 20 years. We then will round out the subtraction by assuming five years of long-term care expenses (since 70% of people age 65 and over may need LTC).

• $1,000,000 retirement budget - $250,000 (healthcare) - $300,000 (housing expenses, taxes, and non-housing debt) - $72,800 (meals for 10 years) - $500,000 (5 years of LTC) = {-$122,800} for other expenses

NOTE: This hypothetical example is for information and educational purposes only. It should not be used to sell insurance products. The example does not consider additional retirement planning money (i.e., Social Security, 401(k), etc.). It also does not factor in additional costs potentially incurred by client/prospect.

As a reminder, this action-packed blog isn’t meant for independent agents to go on the offensive when talking retirement products or strategy with clients and prospects – that’s not in their best interest. Instead, AIPMA provides this ammunition for retirement planning to PROTECT your valued clients from the knowns and unknowns that could happen during those “golden years.”

Sharing information is essential in today’s sales process to help clients/prospects make an informed decision about their retirement planning. Take the time to help, educate, protect, and keep in touch with your clients as they will call you when something is needed – or sadly, when something negative does happen.

“If you have a problem, if no one else can help, and if you can find them, maybe you can hire… the A-Team.” Well, you can locate our A-Team – the AIP Marketing Alliance team – at aipma.com or contact us at (800) 783-5206 Press #2 or [email protected]. Discover why independent wholesalers and agents nationwide have chosen AIP Marketing Alliance, an Integrity Company, as their distribution partner for more than 40 years.

We are #TheRightMIXin26 for independent insurance wholesalers and agents. For more than 40 years, AIP Marketing Alliance (AIPMA), an Integrity Company, serves as a premier life insurance and annuity distribution partner to provide full-service support to independent wholesalers, brokerages and agents from our Troy, Michigan office. NOT AFFILIATED WITH OR ENDORSED BY THE GOVERNMENT OR THE MEDICARE PROGRAM.

AIP Marketing Alliance is committed to supporting our independent insurance wholesalers and agents. Visit our blog on aipma.com to stay informed on these upcoming launches and learn why wholesalers nationwide choose AIPMA as their distributor for selling life insurance, annuities, long-term care insurance, final expense, and much more. Ask about lead programs, access to IntegrityCONNECT’s technology, myAIP CRM platform with customizable recruiter portal, and online tools/resources designed to grow your business. The difference is personal.

AIP Marketing Alliance, an Integrity Company, has developed this electronic communication for informational and educational use only. Be advised, AIP Marketing Alliance, Inc., does not provide legal advice, tax advice, or guidance on issues involving securities laws, insurance laws nor securities or insurance regulations. This material should not be relied on as providing any such advice or guidance to either agents or retail consumers. Within this communication, AIPMA shares links for usage as information only. This content should not be interpreted as solicitation to purchase life insurance, annuities, or other products or as advice designed to meet your clients’ specific needs. Content involving fiduciary, tax, or legal advice should be directed to your legal, tax, and financial professionals for specific advice or product recommendations. AIPMA will not accept any legal liability resulting from any use of 3rd party material(s).