Find ‘Retirement Alpha’ For Your Clients

CHICAGO - Tom Hegna has crafted his own niche in the financial services' speaker-consultant world: retirement coach.

Hegna, who built a career on crafting successful retirement plans, takes the stage today at the InsuranceNewsNet 2018 Superconference outside Chicago. He will talk about finding that magic formula to allow clients to indulge in the retirement good life while setting aside enough income to carry them through.

Hint: annuities are a big part of Hegna's plan.

"So here is a fact: If you have readers who are building portfolios for retirement and they’re not using income annuities, they are building suboptimal portfolios," Hegna told InsuranceNewsNet Publisher Paul Feldman in a July interview. "That is not my opinion. That is a mathematical, scientific and economic fact."

After decades with major life insurance companies such as New York Life and MetLife, Hegna turned full time to speaking and writing about how to ensure fulfilling retirements. He has written several books, including Paychecks and Playchecks and Don’t Worry, Retire Happy!

Hegna is a popular speaker, having appeared on the main stage for major association conferences such as the Million Dollar Round Table’s annual meeting. He has also delivered more than 5,000 presentations of his Paychecks and Playchecks concepts.

Retirement Alpha

Hegna's approach is about bringing "retirement alpha" to clients and bursting false theories. Let's take the first one. Alpha is a measurement of outperformance that the fund manager brings.

A 75-year-old couple can still find retirement alpha in the form of life insurance and annuities, Hena explained.

"Let’s say they want to leave their kids $300,000," he said. "Show them they can buy that $300,000 policy for maybe $100,000. So for pennies on the dollar, they’re buying $300,000 to go to their kids. They’re using the leverage, the mortality credits of life insurance, to go to the kids.

"Now what does that free them up to do with their money? Spend it. Now they can buy a lifetime income annuity that has a much higher payout rate than bonds or CDs or any other guaranteed type income-producing vehicle."

The false theories involve time-honored financial planning beliefs that Hegna finds to be a bunch of hooey. Like not taking any risks for clients in their 70s and 80s.

Actually, the riskiest time is in your 50s and 60s, "because if you lose money right before or right after retirement, it will devastate your whole retirement," Hegna explained.

With an annuity to protect seniors from outliving their income, more risk can be taken.

"That’s another thing that many of these financial planning types don’t understand," Hegna said.

"You’ve got to put guaranteed products in these portfolios to retire optimally."

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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