Sometimes in the Philippines when I talk to someone about preparing for the future they’ll say, “Oh, it’s all right. I’m OK. I don’t need to plan for retirement because when I retire, my employer will give me US$20,000 and I’ll be fine.”
What happens sometimes, though, when the employee retires and receives the promised $20,000? The next day, the new retiree buys a brand new car, and now they have no retirement money. That’s the situation we try to prevent.
How clients can look at retirement differently
Watch more from Timothie Williamson Sy in the video, “How to overcome your biggest challenge — your mindset.”
Retirement is something that a lot of Filipinos — and maybe other nationalities — don’t realize they need to prepare for. If we as financial advisors don’t talk with people about their future, we know that when people get to their retirement age, they may find it difficult to take care of themselves financially without working. You have to open your clients’ eyes about retirement planning.
I do this by giving my client or prospective client a brief preview of how much money they should have in the future to retire comfortably. I explain the reality of inflation and the need to put your money where it will grow better. It’s a very short preview, maybe 10 to 20 minutes.
Two retirement scenarios clients can choose from
I then share with my clients two scenarios. In the Philippines, some parents treat their children like a retirement fund: “Study well and get good grades so that when you graduate, you get a good-paying job because later on, we’ll want to rest and you can take care of us.” That expectation, however, is difficult for their children, who want to start their own family. It’s challenging to take care of young children as well as aging parents. The parents have now become a burden to support. This story hits an emotional spot for the parents who realize they don’t want that.
By comparison, I also tell them about the life they could have if they plan for retirement. Instead of being financially draining, their children and grandchildren will want to spend more time with them just because they’re there. My prospective clients will be able to help with their grandchildren, take them out on playdates and be able to buy them toys and gifts on special occasions.
It’s very gratifying when clients hear these stories and get excited about their future. Once they start planning their future with us, they have peace of mind.
Timothie Williamson Sy, of Bacolod, Philippines, first qualified for MDRT in 2012, which was his first full year as a financial advisor. He now manages 20 advisors. Watch more from Sy in the video, “How to overcome your biggest challenge — your mindset.”
More about how to talk to clients about retirement planning
- Watch “How to talk to millennials about insurance”
- Read “Changing mindsets”
- Watch “The power of words”
Thanks for the informative post! Great tips on retirement.