sun-life-retirement-best-practices

Most clients know it’s important to plan for retirement. But knowing and doing are two different things. According to the 2013 Sun Life Canadian Unretirement Index:

  • 42 per cent of Canadians — including those in their 40s, 50s and 60s — are dissatisfied with the amount of money they’re saving for retirement, and
  • fewer than one in five Canadians (17 per cent) have a written financial plan.

Retirement planning starts with a conversation — and these ideas can get your clients talking.

1. Ask open-ended questions

Closed-ended questions like ‘Do you have a retirement plan?’ and ‘Are you ready for retirement?’ encourage one-word answers. Open-ended questions — which often start with why, how and what — are more engaging. They invite clients to open up and share with you. They also demonstrate your interest in learning more about them. Consider asking clients:

  • How do you picture your retirement?
  • If you retired tomorrow, what would you want to do more of?
  • What would you not want to do anymore?
  • Why do you want to retire at age (x)?
  • What concerns do you have about retirement?
  • What do you look forward to?

Then be ready to dig a little deeper. For example, if a client talks about travelling, find out:

  • where they want to go,
  • how often they want to travel, and
  • how much they expect to spend.

The more you encourage clients to fine-tune their retirement vision, the easier it will be to create a holistic plan.

2. Suggest ongoing communication

When a retirement conversation gets rolling, other topics are bound to come up:

Make note of these things but avoid trying to resolve everything in one conversation. Instead, position retirement planning as an ongoing process — and arrange your next meeting.

3. Encourage awareness of public plans

Clients who think that Canada’s public pension system alone will sufficiently fund their retirement will likely be in for a surprise.

CPP – The Canada Pension Plan (CPP) is designed to replace about 25 per cent of the average Canadian’s lifetime pre-retirement employment earnings. How much a client receives is based on how much and how long they contributed to the CPP. For 2014, the maximum CPP monthly pension at age 65 is $1,038.33. In January 2014, the average monthly CPP amount was $594.19 or less than $150 a week.

OAS – The Old Age Security (OAS) pension is a monthly payment available to most people age 65 and older who meet the Canadian legal status and residence requirements. Employment history isn’t a factor in determining eligibility — clients can receive OAS even if they’ve never worked or are still working. Currently, the maximum monthly OAS payment amount is $563.74. However, for higher-income Canadians, the OAS pension recovery tax (or OAS clawback) can reduce or even eliminate their OAS payout.

The more your clients know about CPP and OAS, the better. Suggest they visit government-based websites about retirement planning and Canada’s retirement income system. Then be prepared to talk about supplementing their income through their own retirement plan.

4. Expand your comfort zone

Empathy is a common quality among many advisors. However, it doesn’t always prepare you for retirement discussions that go beyond life, health and wealth solutions. For many clients, retirement is an emotional time. In addition to financial matters, they may want to talk about their feelings or fears — which could take you out of your comfort zone.

Fortunately, good resources about the emotional aspects of retirement are just a click away. Check out ‘When retirement triggers emotional turmoil’ and learn how clients can address their feelings. Share the links within this article with them and reinforce your role as their trusted advisor.

5. Make the most of Money for Life

Money for Life is Sun Life Financial’s customized approach to financial and retirement planning.* It can be a great conversation starter for clients at any life stage, encouraging them to build and protect their savings, protect their families, cover future health needs and plan for retirement.

Extensive Money for Life resources include brochures, whiteboard videos and an interactive web app. Use them in meetings as a way to engage clients and get them talking about retirement and talk with your Sun Life Sales Director to learn more.

* Only advisors who hold CFP (Certified Financial Planner), CH.F.C. (Chartered Financial Consultant), F.Pl. (Financial Planner in Quebec), or equivalent designations are certified as financial planners.

Sources:

http://www.servicecanada.gc.ca/eng/services/pensions/cpp/publications/cppretirement/index.shtml#Toc1_1

http://www.servicecanada.gc.ca/eng/services/pensions/oas/payments/index.shtml

Originally published on Advisor.ca