The Matsko Matrix

"Our mission is to help clients maintain their independence, economic freedom and dignity throughout their lifetimes," says Matsko, a certified financial planner. "But what we've found over the years is that as people prepare to enter the distribution phase, they have difficulty categorizing their expenses in retirement."

To help them, Matsko has developed a matrix, shaped like a pyramid, that outlines the four layers of expenses and how they should be funded. The bottom layer, the core, includes food, clothing, housing, insurance, taxes and transportation and is tied to income sources that can't be outlived: employer pension, Social Security and personal pension annuity.

Next are the joy expenses, like travel, hobbies and entertainment, that are linked to dividends and interest from existing investments. After that, there's accumulation: expenses dedicated to college funding and the purchase of things like a boat or a second home. The funding sources: the sale of capital assets. Finally, at the top of the pyramid, is wealth transition, the transfer of remaining assets and insurance to heirs and charities.

"This is a very visual concept — and it's interactive. We find that people relate to graphics and images more than they do to spreadsheets and narrative," says Matsko. As part of the process, expenses and income sources are entered into a Matsko-developed software program that can tell people whether they are going to run out of money or not.

"It's helping advisors have a process-driven conversation with their clients about income. It's not about transactions and may or may not lead to a product solution," says Matsko. [Still, Matsko reports that 14 weeks after launching the pilot program, with 69 out of a control group of 150 advisors weighing in, 91 percent had sold an annuity for a total of 302 sales.]

Matsko, who started out with Lincoln Financial in 1976 with a part-time assistant, has three goals for clients: to guarantee they will always have the money to fund their core expenses, at the very least; to try to make sure the money maintains or exceeds the pace of inflation; and, in the event of premature death, to transfer assets to heirs or charities in the most tax-efficient manner possible."

One of Matsko's missions is to help people crystallize their vision of retirement from a psychological as well as a financial perspective.

"I'm really into serving Middle America, the folks who truly need this kind of process. My vision is that planners in the industry will adopt a process-driven approach whether it's the Matsko Method or their own version," he adds. "Retirement is no longer black and white. It's a thousand shades of grey. I'm a big believer in the holistic approach — really talking about people's lives before talking about people's money. And it starts with this little pyramid, with dreams and goals. It allows you to let people dream — and then link their money to it."