Have you ever thought about how many moons there are in the universe? If you answered no, that’s not surprising. But as we have more time at home and I’m traveling less, I’ve spent more time outside. In addition to enjoying my balcony, I’ve dedicated time to looking at different industry thought leaders. And I’ve spent some time gazing at the night sky, just enjoying the view.
Last weekend, I read an article from blogger Seth Godin who, in his post “How many moons?” was reflecting on similar topics. Someone asked him recently how many moons he thought there are in the universe. Not having any idea, he made an educated guess. The Earth has a moon. There are nine planets in the solar system (if we consider Pluto a planet). So, he guessed there are probably around 22 moons in our solar system. But he was way off. The correct answer is that we have more than 200 moons. In fact, one planet alone has 80 distinct moons.
By now you’re probably wondering what moons have to do with retirement planning? Or anything, actually. Here it is. Just like when Seth tried to figure up the moons, he thought only about the things that were relevant to him. He wasn’t thinking big enough.
Getting a little more specific, let’s focus on Social Security. If you talk to your clients about Social Security, they will think small and consider what’s in their own neighborhood. What did their friends do? Or their parents? And most likely they will conduct an internet search or two about the best way to get the most out of Social Security. But they won’t be thinking about the bigger picture, which is the Social Security System itself. And that’s something that’s worth considering.
Historically, only 2% of men and 4% of women take Social Security when it’s maximized at age 70. So the vast majority of Americans take Social Security early. In fact, more than 50% take it early, and that’s a reduction number. Why are so many taking Social Security early, instead of waiting for it to max out?
One reason is that they don’t trust it to be there when they reach full retirement age. But according to US Treasury regulations, if there is even $1 of tax revenue coming in, Social Security is going to be paying out. So, the next thing to consider is what that payout is. And the amount paid out might very well be reduced.
So what your clients’ friends and parents used as a planning strategy for Social Security likely won’t be right for your client. Think back to the moons and looking at the bigger picture. What are they, and we, missing?
We need to figure out how to shift that risk which, before now, wasn’t feasible. But with innovative product design and more appropriate asset location than asset allocation, there are more options to consider. Or, we can see beyond our own small neighborhood and catch a view of a moon in another sky. But it requires you to think differently.
Instead of thinking about the funding crisis of Social Security, think about how to shift that risk of the reduction. Don’t focus on the elimination of Social Security It’s an opportunity to attract more clients and earn better assets under management. And it will add longevity to your business, allowing you to remain relevant through the greatest shift from the workforce to retirement our country has ever seen. And, by changing your thinking, you are taking a necessary step to building your business into a High Performing Practice.
By broadening your thinking and looking beyond common strategies of the past, you can help your clients maximize their Social Security benefits. And you’ll be growing your business at the same time.
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