HEARD: Family Protection, Estate Planning or Retirement Income?

Heard in the Hallways of Million Dollar Roundtable's 2015 Meeting: Day 1

Question: Between family protection, estate planning and retirement income planning, which is the dominant focus in your practice this year and why?

“My focus is on estate planning but I prefer to call it legacy planning. The term estate planning has become too focused on buying a life policy, especially for tax purposes, and that’s it. The focus gets put on numbers and running spreadsheets. I prefer the term legacy planning because it deals with planning that perpetuates not only the money in the estate but also the values and goals of the person and family doing the planning. It’s not just tax planning or dollars and cents. It’s planning that is based on what is important for the client to pass down. When we talk about that, clients get more excited because now it means something. Often they buy more life insurance (for protection as well as legacy). As for retirement income planning, that’s very important to defining the ‘number’ a client needs for a comfortable retirement. But the discussion still goes back to the question of, ‘Why? What is important to you?’ When they decide THAT, the planning becomes more important to them.”

—Chuck Ebersole, legacy wealth coach, Hoyle Cohen, Sacramento, Calif.

“For me, the answer is estate planning. I focus on small cases, lots of them. This is estate planning for middle-class Americans. They often have a net worth of $200,000 to $400,000, a good pension and retirement income. But they need to address the survivor benefits for when one of the spouses is gone. We look at their income, and ask, ‘What will you do when the Social Security benefits for the deceased spouse is no longer there? And does the pension have a survivor benefit, or does it stop when the pensioner dies?’ We don’t want to be the bearer of bad news, but we point out that this is something that the needs to talk about. Life insurance becomes important if the analysis shows a real deficit, especially in view of today’s increased life expectancy and the fact that the Social Security income on one of the spouses will no longer be there. We also look at income tax planning, wills and trusts, how to avoid probate, the naming of beneficiaries, long-term care planning and other areas. In other words, estate planning is not all about death taxes. I’ve found that there are a lot of half-million dollar cases out there that need our help.”

—W. Robin Christensen, Modern Woodmen of America, Pensacola, Fla.

“My focus is retirement income planning. The evolution of riders and options to create retirement income streams in the past 10 years means this is a game-changer. Today we have lots of options to help Americans plan for retirement income and as well as to make investments. When I open up the discussion about this, I find that most people are busy with investing or riding the retirement roulette wheel. They never know where they will end up. So we discuss how, with proper retirement income planning, we can help assure that they will be able to retire comfortably and avoid the pitfalls of investing. Most Americans want to invest and do the right things. But in the climate we have today, they fear that they could see the money they are putting in the stock market fall way due to a market correction, and it could happen just at the time they need it most. So the solution is to use some of the income planning products we have today to help them insure their future income.”

–Frank A. Burrola, principal at Arroyo Financial, Arroyo Grande, Calif.