The foundation of my practice has been built on working with aging baby boomers and retirees. I have targeted clients who are either already retired, or who are planning for the transition into retirement in the next five years. This approach typically focuses on the first half of the baby boomer generation.
However, I have become increasingly convinced of the significant opportunities available with the middle and younger baby boomers, particularly households in their early 50s. This younger wave of baby boomers will not be able to depend on traditional retirement planning.
Traditional planning involves the three-legged stool of retirement: Social Security, pensions and personal savings. The three-legged stool is broken. In my opinion, these younger boomers are going to have to retire much more independently than today's retirees. They simply cannot afford to depend on the federal government and their employer to help foot the bill.
I recently began working with a client who fits this mold. Both the husband (age 48) and the wife (age 50) are young professionals with high income. They want to retire and maintain their current lifestyle, and they realize they cannot simply depend on Social Security. They also have no pension plan through their employers.
Multiple streams of income
My job as their advisor is to help them create multiple streams of income. Because they understand the three-legged stool is not viable for them, they need more of a scaffold-like approach to retirement income. My clients need multiple buckets of money to produce multiple sources of income.
In the insurance industry we have tremendous resources available to help address this problem. Today's income riders provide a great opportunity to effectively establish a base pension for our clients while helping them maintain control of the principal.
