Retirement Income “REWIREMENT


Programme Synopsis

Breakfast Session

Rewiring Retirement Income and How to Build Retirement Income (Dr. Guy Baker & Curtis Cloke)

Dr. Guy’s will share on:

  • There are two financial stages of life – Accumulation and Decumulation
  • Tying Human Life Value to Retirement – Are you a Bond or an Equity?
  • How to develop a critical angle when you talk to clients.
  • Understanding how much risk they are buying
  • Inability to answer the THREE most important questions about Retirement
  • Clients want Solutions – but solutions are meaningless unless the client understands the problem.
  • Understanding the difference between Performance-based income and Amortization based income
  • Combining investment alternatives to stabilize and create consistent cash flow.

Curtis’s talking points pre-retirees today must have:

  • A written plan
  • Understand the 4 L’s of retirement:
    • Longevity
    • Lifestyle
    • Legacy
    • Liquidity
  • Diversified allocation
  • Determine a safe withdrawal rate from market-based withdrawals
  • Consider promised based income options for essential expenses
  • The three basic retirement income strategies:
    • Systematic Withdrawal Income Plan
    • Time-segmented Bucket Plan
    • Income Floor Plan
  • Hybrid plans that combine the best of three elements of the 3 planning options

Morning Session

The Fourth Generation of Retirement (Dr. Guy Baker)

Retirement thinking has gone through at least four iterations in the last 50 years. It recognizes the increased risks facing a new generation of retirees. Retirees who are living longer, requiring more medical care and are able to live more energetic lives. The progression went from an Endowment approach to income – to what exists today. The new thinking re-examines income requirements as a function of aging. It also looks at ways to establish a more consistent and stable income to offset sequence risk, inflation and longevity risks.

This session will look at the various factors contributing to the retirement crisis and specific ways financial planners can utilize client’s resources to enhance retirement income and stabilize the risk. The session will cover three ways to build a retirement income and how each one compares when looking at the optimal Withdrawal Efficiency Rate.

Four Core Retirement Measurements (Curtis Cloke)

The retirement landscape is changing fast today. Medical inflation is skyrocketing, company pensions have almost evaporated, market volatility of the 21st century is behaving very differently from the 20th century and the initial theory of the initial 4% rule. Interest rates are lower today for sustainable periods when compared to previous periods and longevity of human survival continues to extend as medical technology continues to improve with science break throughs.

During this session, we will discuss the 4 L’s of retirement planning: Longevity, Lifestyle, Legacy and Liquidity. The 4 L’s lead us to the discussion of the Four Core Measurements: Investment Net Worth, Withdrawal Rates, Reliability of Income and Discretionary Liquidity. These four visual charts frame quantitative and qualitative measurements and frame the safety or risk of safety when forecasting retirement plans. This dashboard of measurements is based solely on math and science and reveals this simply to the retiree.

Advisers must have a method of measuring the safety of each retirement plan they are building for each retiree. Advisers must quantify in simple visual and descriptive measurements that help each retiree understand the utility of safety or risk associated with their expectations of retirement sustainability. Each retiree plays a movie of retirement in their own minds. This is their perceived picture of retirement as they play this movie. They need to know the reality of authentic math and science as it relates to their plan given the resources they have acquired during their working years and if such resources are enough to meet the long-term goals safely.

This session will also focus on the Illusion of Control as it relates to liquidity and the double counting of assets for liquidity that often is misunderstood. Some assets are required to be held hostage to finance the income and lifestyle needs of the retiree and those assets are not free to provide discretionary liquidity.

Afternoon Session

Learning the Basic Components of Money Management (Dr. Guy Baker)               

This session will discuss how markets work and how five Nobel Prizes have contributed to understanding Asset Allocation. It is no longer acceptable for advisers to build a diversified portfolio of mutual funds and expect the funds to achieve a return based on historic performance. Research based evidence shows not all segments of the market are equal in risk or return. Using the research and scientific method, this session will discuss the psychology of investing and how to educate clients about the importance of efficient diversification and how to allocate on the efficient frontier. Session will cover expected return, allocation methodology and how to find the efficient frontier.

Protecting Your Clients from the Greatest Financial Risks Facing Retirees (Curtis Cloke)

Knowing what retirees want when selecting a retirement planning adviser is critical in attracting pre-retiree clients and developing the core competencies necessary to provide genuine assistance for such retirees.

The first step in knowing what retirees really want is to have a process to get to know them well. Understand their fears, i.e. what keeps them up at night, and to have a clear understanding of their ongoing life goals and objectives. They want to know they have been heard, not just to be listened to, Their goals will include both financial and non-financial goals. Helping them design a financial plan for retirement income, while also helping them discover the utility of meaning and purpose for their retirement years. Finding purpose and meaning while setting reasonable and safe expectations for income and lifestyle will extend their life with more meaning and happiness.

Once connecting with the pre-retiree at a level they feel heard, the next step is to educate about risks in retirement. Understanding the risks associated with retirement and refining those risks to the top 5 risks each retiree must mitigated and address as much as possible. The top five risks are Longevity, Medical Expenses, Inflation, Sequence of Returns and Market Volatility. This session will discuss methods and technics to help advisors mitigate such risks when allocating assets to both income, growth, legacy and liquidity goals.

The Basket of Products concept discusses the need for considering all of the tools used for mitigating and selecting for allocation of assets to meet all goals of sustainable income, legacy growth and liquidity goals. We will also discuss the Product Allocation Risk Glide Path and the Divide and Conquer approaches to allocating both safe income and long-term growth of assets.

We will define the Three Basic Income Strategies and discuss Hybrid Methods to layer each of these concepts together. Promised Based Floor income products will also be defined in this material.

Finally, putting it all together to define methods and strategies to limit risks and fears while helping pre-retiree’s retiree (ReFire) with confidence.

Key Takeaways:

  • Knowing what retirees want
  • Getting to the Heart of the Matter
  • Understanding Fears vs. Risk
  • Top Five Risks – Know the 18 Retirement Risks
  • Thrive Product Glide Path of Risk
  • Basket of Products Approach
  • Divide and Conquer
  • Buy Income and Invest the Difference®

Panel Session

How to Become A Trusted Adviser and A Retirement Income Specialist (Dr. Guy Baker & Curtis Cloke)

Dr. Guy’s will share on How to Become a Trusted Advisers:

  • Majority of these 20,000 clients using financial advisors all said Peace of mind was their #1 issue
  • You must have and communicate effectively your business process. Using the FREE method
  • Factfinding
  • Review
  • Education
  • Elucidation
  • Procrastination means they need more information to make a decision
  • Three types of investors Gamblers, Speculators and Long Termers -different profiles
  • Learn to communicate effectively why you are making this recommendation
  • All clients want basically the same thing – security of income
    • Your job is to disclose the risks and the REWARDS
    • Matching the Consulting process to the client process
  • Investment clients demand a higher degree of maintenance

 Curtis’s talking points for what Advisers do to Become a Retirement Income Specialist:

  • Know your client as good as you know your products
  • A Process to helps you get to know that client
  • Getting to the Heart of the Matter
  • What keeps them up at night “fears’”
  • What are the risks that most threaten their retirement
    • Understand the cycle of decision
    • STOP PROCRATINATION by contrasting BIG problems
    • People solve BIG problems and not little problems
    • Use visuals (picture contrast of the Problem) that frame the size of the problem before using numbers
    • Client-driven discovery rather than Advisor-driven approach
    • Must have software to frame true retirement analytics
    • DO NOT MENTION YOUR PRODUCTS until you have contrasted the problem with potential solutions that frame the safety of the 4 L’s.
    • Retirement planning is NOT a onetime event…it is an ongoing process as time changes overtime
    • Review life changes and progress annually