Help Your Clients Protect Their Social Security Benefits

By Staff Writer Sponsored By PlanGap

PlanGap is pioneering ways to empower advisors to solve the largest unaddressed fear in retirement planning.

David Duley, Founder and CEO of PlanGap, knows firsthand the feelings of frustration and helplessness that result when broken promises destabilize a family’s financial well-being. Growing up in Flint, Michigan, David experienced the devastating effects of General Motors declaring bankruptcy, closing their factories, and laying off 90% of their workforce.

Today—with the Social Security Administration warning that by 2033 they’ll only be able to pay 76% of promised benefits, and independent research consistently finding that Americans’ #1 concern in retirement planning is that their promised Social Security may be cut—David is on a mission to ensure that, unlike the families in Flint, retirees and pre-retirees have the solutions and information they need to take control of their financial success in retirement.

In this Q&A, David not only shares more on the solutions PlanGap is building, but also, as an exclusive debut for INN readers, he introduces a new powerful diagnostic platform that will drive conversations and lead generation in 2022 and into the future.

Q: To start, what does PlanGap do?

A: I’ll begin with the big picture. Study after study finds that there are four major concerns in retirement planning: Will I outlive my savings?, Will my Social Security be reduced?, Will I have a health impairment?, Will I be able to leave a legacy to my children and grandchildren?

Annuities and life insurance have been wonderful solutions to address concerns about outliving savings and leaving a legacy. Two decades ago, the industry began adopting long term care solutions that address health impairment concerns. PlanGap is bringing the next generation of living benefits to the life and annuity market to further address the top remaining concern in retirement planning: the fear that Social Security will not be able to pay retirement income in its full and promised amount. We are laying the foundation so our industry can be the first to lead with a solution.

Q: What goes into laying that foundation?

A: I look at it as three different but complementary lines of work. First, we develop life and annuity products that offer the industry’s first triggered benefit if your income from Social Security is reduced by a government mandated rule change. PlanGap made insurance history by launching the benefit as part of a five-year multi-year guaranteed annuity (MYGA) in 2020.

Then, in 4th quarter of 2021, we announced an exciting partnership with North American, an A+ carrier, and Annexus, the premier designer and distributor of retirement solutions. Together, we introduced a highly competitive fixed index annuity (FIA) that features PlanGap’s proprietary Social Security Protection. Second, we partner with the best distribution groups to bring these solutions to the market. Third, we’re building tools for our carrier, distribution and agent partners that empower them with resources to educate their clients about the financial challenges facing Social Security and how to prepare for the possibility of reductions to their Social Security income.

Q: Congratulations, it’s wonderful to see that kind of innovation happening in a life and annuity industry that can be, how do I put it, stale?

A: [Laughs] Thank you. What I’m most proud of is that we’ve been able to bring captains of the insurance and finance industry to the table to begin tackling this enormous gap in retirement planning. Milliman has been an integral part of our product development process. Annexus and Ash Brokerage have been tremendous partners and early adopters in helping us introduce PlanGap Social Security Protection to advisors.

Then, there’s the entrepreneurial carriers, American Life and North American, that we worked with to develop our first products. Together, we’re bringing solutions to the market to help clients worry less about the “what-ifs” when it comes to their Social Security income in retirement. That’s why I’m excited to debut today with your readers our latest tool and that’s the PlanGap Social Security Risk Score.

Q: A score, meaning I could see how at risk my Social Security income is?

A: Exactly. The government is warning that by 2033 they’ll only be able to pay 76% of promised Social Security income, so mathematically they are going to have to change the rules. One potential fix would be to start means-testing Social Security and as a result high-earners would see their income from Social Security reduced. It would be similar to how if your income was over a certain level, you didn’t get the COVID stimulus checks.

I’ve talked with advisors who immediately dismiss that their clients are at risk of reductions, but when I bring up means-testing, many agree that could happen to their clients. Advisors need to change their thinking and accept that due to the shifts in political power, there is real risk to their clients.

Until today, if a client asked their advisor how susceptible they are to reductions in Social Security income and how at risk their retirement plan is to a reduction in Social Security income, that advisor would have no answer tailored to that individual’s situation. Today, that changes. For the first time ever, PlanGap is providing a tool that empowers advisors to help their clients manage their unique risks. It’s a gamechanger.

Q: Explain more why it is a gamechanger.

A: The advisors I talk to are passionate about helping their clients plan for the future so that they can be successful on their own terms. However, the ways that the government may decide to change Social Security’s rules is outside their clients’ control. The narrative that politicians will act in the best interest of the Baby Boomers is becoming obsolete.

Politicians vote in line with their largest and most powerful constituencies, and more and more those are the younger generations. Advisors need to consider the significance of what a reduction in Social Security would mean to their clients’ retirement plans. For a two-earner household in good health and who had above median income in their working years, Social Security is promising to potentially provide over $1.5 million in income.

In this interest rate environment, you’d have to write a serious check to purchase an annuity that generates that kind of income. So, we think it’s important that agents educate their clients on just how big of an “asset” Social Security really is. People want to protect their largest “assets”—think home insurance, car insurance, health insurance. You look at some retirement planning software, and you see scenarios where an advisor showcases a 95% chance of the plan succeeding, and then you model in a 24% cut to Social Security in 2033, and suddenly that plan’s chance of success is less than 50% — essentially, a coin flip.

Q: A coin flip? That’s alarming!

A: We need to give people a way to protect their promised Social Security income so that their retirement peace of mind is not used as a political football.

Q: So, the PlanGap Social Security Risk Score is personalized?

A: Everyone reading this can see for themselves. Take the quiz to see your own PlanGap Social Security Risk Score. You’ll see how your score is calculated based on your personal situation and the risk factors unique to you.

Q: I’ve really enjoyed our conversation, but I’m anxious to wrap this up and see how at risk my Social Security income may be.

A: Look, you’re not alone in being concerned your promised Social Security income may be at risk. It is a massive unknown lurking over all our retirement plans. It’s what makes the PlanGap Social Security Risk Score so powerful.

Advisors can access it to educate and attract the millions of retirees and pre-retirees that are looking for answers and solutions that help them gain control. This will be the most effective tool for lead generation and retirement planning in the year 2022 and beyond.

Start using it for free today, and what you’ll find is that by offering clients a way to assess their risk and protect their hard-earned Social Security income, you’ll stand out from the competition and your practice will grow.