LIMRA has released a new study that discusses how the insurance industry can capture more retiree assets. The study reveals that 45 percent of retirees still have assets in their retirement savings plans with their employers, most frequently in their 401(k) plans, and almost a fifth of retirees own three or more IRAs in their households.
The mass affluent retirees with assets of $100,000 to $500,000 are more likely to have relationships with insurance companies than any other market segments. However, as a whole, retirees have only 9 to 10 percent of their assets invested in products and services offered by insurance companies.
According to LIMRA surveys, retirees start to think about the decision of what to do with their retirement plan balance well in advance of retirement. In fact, LIMRA research shows that the majority of retiree assets leave their employer-sponsored plans within the first 12 months of their retirement.
Retirees and pre-retirees will typically need to make a series of retirement-related financial decisions starting at age 591/2, the age at which they can withdraw from their tax-qualified assets without penalty, to age 701/2, when they must take IRS required minimum distributions from their qualified savings. In between, they have to evaluate when to take Social Security benefits and enroll in Medicare and its supplements. All of these financial decisions can be part of a retirement plan directed by an insurance professional. LIMRA research shows that many investors are buying guaranteed income annuity products at these key age-based financial decision points.
Existing relationships are critical to securing rollover business. A financial planner or advisor is often the first person retirees or pre-retirees consult regarding the rollover decision if they have an existing relationship. If possible, offering personalized investment guidance can be a way to strengthen relationships and increase their chances of retaining assets.
Retirees both under and over age 70 need help managing their retirement plan assets to ensure they comply with all legal requirements. Sixty percent of retirees above age 70 who are taking withdrawals are only doing so to meet IRS required minimum distributions and they often take withdrawals through systematic withdrawal plans. The current research finds that most retirees get help from a financial professional or a phone representative to set up the plan.
“Bottom line,” according to Jafor Iqbal, associate managing director of LIMRA Retirement Research, “the difference between capturing these assets and losing them to a competitor is whether you are with your clients when they have to cross some of the financial decision points before and during retirement.”
John Rippinger, president, Resource Brokerage, LLC, Schaumburg, IL, was recently honored with the Edward H. O’Connor Memorial Distinguished Service Award at the annual meeting of the Chicago & Northeastern Illinois Chapter of the National Association of Health Underwriters. This award is given to one person each year who has rendered special service to the institution of health insurance over many years or to a person who contributes outstanding service to the field of humanities in the city of Chicago or the Chicago metropolitan area.
Rippinger has worked in the insurance industry for more than 40 years and currently owns six other companies in addition to Resource Brokerage. In addition to his contributions in the insurance industry, Rippinger is well known for his philanthropic endeavors for Children’s Home + Aid, Ronald McDonald House Charities, MIA Hunters, Angel Flight, Boy Scouts of America and the USO.
Peter Gelbwaks, chairman, Gelbwaks Executive Marketing Corp., Plantation, FL, and chairman emeritus of the National LTC Network, was recently awarded the Florida Assisted Living Coalition (FALC) Life Time Achievement Award for his meaningful contributions to the insurance profession. Proceeds from the dinner/roast ceremony went to Gelbwaks’ favorite charities, the Jewish Family Service and the Parkinson Education Network.
The Florida Assisted Living Coalition is an organization with the mission to provide education, enrichment and empowerment to health care professionals by providing seminars and conferences.
Gelbwaks has been an insurance professional since 1969; he founded his agency that year. He is a member of the board of directors for 3in4 Need More and has served on the boards of the American Association for LTC Insurance, South Florida Chapter of NAHU, and the National LTC Network.
