08.17.20

“How Much Do I Need?” Discussing Retirement Savings With Millennials, Gen Xers and Baby Boomers

Throughout my career, I’ve worked with financial professionals and consumers who span a variety of age groups and demographics. I observed two truisms over the years – a financial professional tends to be about ten years older or younger than his or her client base, and your age isn’t the determining factor in selling financial products effectively to a variety of age groups.

Financial professionals need two things to sell effectively to clients of any age:

  1. Ask the right questions.
  2. Adopt new technologies.

These two factors will help you prospect, sell and nurture relationships effectively over the span of your career. They’re also the key to discussing retirement savings with millennials, Gen Xers and baby boomers.

Use Technology and Questions To Connect With Clients

From electronic applications to social media channels to powerful modeling software, there are more tools at your disposal today than were available to previous generations of financial professionals. These tools can help you find new clients and connect with them. When you’re explaining financial products, technology can be a powerful ally in helping clients understand what those products can do for them.

Embracing new tools and learning how to use them fluently will help you grow your business and provide better service, as will asking the right questions when you’re with clients.

Different generations have different needs, because generally speaking, peoples’ financial needs change as they age. Understanding these variations can help you ask probing questions that help prospects and clients see their needs and be open to a conversation with you about what financial products may help meet those needs.

Discussing Financial Needs with Millennials

In the prime of life, millennials are typically starting families and buying homes for the first time. It would be easy to overlook their need for life insurance, but it can still play a valuable role in protecting their mortgage, covering burial needs and, as their children are young, providing future insurability. The best time to buy life insurance is when you are young, as it is generally most cost-effective then.

Ask millennials questions like how their house payment or rent would be covered if they or their partner suddenly perished. Or how funeral costs would be met. Death is a topic no one ever likes to talk about, but pointed questions can bring people face to face with the unpleasant realities we like to avoid. When you follow up those questions with financial products that provide answers, you can help clients understand their needs on a deeper level.

Another need that millennials have is saving for the future. Retirement may feel far off when you are young, but your job is to help your younger clients understand the incredible power of compound interest. Ask millennials if their employer offers a 401(k) match and encourage them to take advantage of it to begin saving for their future. The more money they are able to set aside today, the more they will have to enjoy when they no longer have to labor.

Discussing Financial Needs With Gen Xers

Older than millennials but younger than baby boomers, Gen Xers are generally in their prime earning years. Income is up, but so are expenses. Children are older and both saving and paying for college tuition, cars and various extracurricular activities is an expensive reality for many Gen Xers.

Life insurance fades into the background, as does saving for retirement, as harried people just try to keep up with the demands of the day. Understand this reality as you ask the same questions you would of millennials.

What would happen to your family if you or your partner suddenly didn’t come home from work tonight? Who will pay the mortgage? How will your children afford college?

There will be a greater need for life insurance and in greater amounts for Gen Xers, who have more expenses to cover. There’s a real need for both income earners in the family to have adequate amounts of life insurance, which a mixture of term and permanent policies staggered in 10, 20 and 30-year increments may be effective in meeting their needs. Saving for the future is also critical at this point. They too need to be taking advantage of their 401(k) plan at work.

If a client also owns a small business with a partner, don’t overlook the role of life insurance in providing key man insurance or benefits to highly compensated employees.

Discussing Financial Needs With Baby Boomers

Baby boomers are in the fortunate position of looking back with satisfaction on a lifetime of work and looking forward to years of rest and relaxation — if they have saved appropriately. Retirement is funded by the years of work a person puts into it. If they die, they may not have enough saved to get their family through retirement. While life insurance is more expensive at this point in a client’s life, it still plays an important role in the waning years of work.

Expenses should be less as children have grown up and begun independent lives. It is a good time to be both aggressive about saving for retirement and protecting remaining working years with adequate life insurance.

Trends reveal that people don’t actually spend less in retirement. In fact, spending tends to rise as people take long-delayed vacations or move on lifelong dreams of lake homes and other ideals. For this reason, life insurance is critical in protecting those dreams should baby boomers’ highest income-earning years be cut short.

Principles To Apply to Clients of Any Age

Smart financial professionals begin conversations with clients by learning all they can about them.

Where are they in their lifecycle? What liabilities do they have? If they don’t make it home, how will their family continue? What are their needs, wants and responsibilities?

From there, they recommend products that address those factors. They use technology and tools to make sure clients understand how those recommended products may help them. They prove their value by helping clients traverse the often confusing world of financial products. But perhaps even more importantly, they help clients face their emotions about life and the end of life and make decisions in their best interest that will benefit themselves and their families for years to come.

If you have questions on meeting with clients from different generational backgrounds, connect with me or send me a direct message. My passion is helping independent financial professionals succeed.

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