Bridge, gap, survivor — it might sound like the plot to a B-movie disaster flick, but it’s actually three effective Social Security
arguments that agents and advisors can use in their life insurance and annuity discussions. I’ll go further and say these are three arguments all agents and advisors should include in client meetings. They’re short, powerful and immediately intuitive.
— The client might retire at age 62 and not want to take Social Security early due to the accompanying penalty. The client might also want to wait to leave the workforce until the full retirement age (FRA) of age 66, but then delay the beginning of their Social Security payments until age 70 to maximize the delayed retirement credits. Whatever the reason, they’ll still need income and any component of the delay can be covered by either a deferred or immediate annuity
, depending on their individual situation.
2. Fill the gap
— More Americans are relying on Social Security for a greater portion of their retirement income. While it’s no doubt an effective program, most pundits and politicians view the increased reliance as problematic, because a fixed income consisting of Social Security often just isn’t enough. The difference between what a recipient gets and what they need can also be covered by either a deferred or immediate annuity, again depending on their individual situation.
3. Survivor’s benefits
— Survivor’s benefits (also called widow’s or widower’s benefits) are benefits a person receives based on their working spouse’s earning records after the spouse dies. Unfortunately, the spouse rarely receives as much as they expect or need. Life insurance
would therefore act as an appropriate solution, one that could be suggested to cover the shortfall after a thorough calculation and explanation of their estimated survivor’s benefit.
Recognizing that Social Security alone is rarely enough to enjoy an affordable quality of life in retirement, combined with a thorough explanation of the survivor’s benefit, naturally opens an opportunity for a conversation about annuities and life insurance. It’s a great way to use Social Security as a springboard to a larger retirement income discussion, and the products that come with it.