5 questions to test how scared your client may be

MetLife marketers are trying to sell employers on the idea of ​​offering annuity options to participants in 401(k) and other defined-contribution pension plans — not just a chance to withdraw the assets in the form of a lump sum.

The company sponsored a survey of 1,911 American adults, ages 50 to 75. The sample included 1,004 “pre-retirees” or pension plan participants who planned to retire within five years, and 907 retirees. The retirees in the sample had a balance of at least $25,000 in workplace pension plans when they retired.

MetLife reports that 96% of participants who receive benefits in the form of an annuity or lifetime income stream said they were very or somewhat satisfied with the annuitant decision. Only 4% said they regretted the annuitant decision.

The company also found that 35% of retirees in the sample who made lump-sum plan asset withdrawals gave a significant portion of the money to at least one person or group. That percentage jumped from 23% in 2017, when MetLife sponsored a similar survey.

The test of fear

For a retirement income planning specialist, one of the most interesting parts of the survey report might be the discussion of the questions and results that the survey team used to measure true risk tolerance. some participants.

Many people might tell their finance professionals that they are comfortable with investment risk, but the survey team found that less than 40% of pre-retirees surveyed were comfortable even with the hypothetical idea of ​​engaging in any of the five physically risky activities described.

Less than 30% of retirees who participated said they preferred riskier activities.

Finance professionals could experiment by asking their own customers and prospects a similar set of questions over time, and see how the test results correlate to the likelihood of a customer calling in panic due to a drop. of the value of the portfolio.

See the gallery for an overview of the questions MetLife asked and the answers it got.


(Image: deagreez/Adobe Stock)

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