We get them ALL THE TIME! They look like the sleaziest things you can imagine (if you read between the lines) — post cards offering a free meal at a local restaurant in exchange for hearing a presentation about a given retirement topic.
Most of them look like they are trying to sell either insurance or annuities, but I can’t be 100% sure. I believe they don’t want to be completely open about their intentions (I’m guessing that would put a damper on response rates), so they keep things kind of vague (similar to the ways a timeshare company operates).
But I’ve been curious about what these are really like so I’ve kept my eyes open for the right opportunity. I wanted to find one with a convenient time and location so I could attend and see for myself. Plus I figured no matter what happened it would make for a good blog post. 😉
After waiting for the right opportunity, we finally got a great option in October. This post will tell you what the offer was, give details of the event, share what we thought of it, and so forth, giving you a glimpse into what these sorts of events are about.
A couple notes before we get started:
- I’m going to break the review into two posts. This one will deal with the process of them soliciting us, us accepting, our attendance, and what they had to say about personal finances in a Q&A session at the end. The second will center on “how to have a great retirement”, the main idea of the presentation portion.
- You’re going to be surprised at my conclusions. I went in with one expectation and came away with a completely different outlook.
With that said, let’s get started…
Retirement Seminar Mail Solicitation
As I said, we get offers to attend one retirement seminar or another almost every week. These come in the form of postcards sent to us via mail.
In early October we received one such piece and it looked like this:
There were a few things that made this offer stand out from the others:
- It was at a restaurant we had been wanting to try — an upscale Italian place (I’d been there once before but my wife hadn’t).
- It was near our house. Very convenient.
- It offered a lunch option. Dinner is usually too late for us as we eat around 5 pm.
- The seminar looked at least somewhat interesting. I suspected there was going to be a sales pitch of some sort, but at least the presentation appeared to offer some value compared to “Learn How Annuities are Vital for Your Retirement”, which is the sort of offer we usually get.
I asked my wife and she was up for attending. So we selected the lunch option on Thursday, October 17.
I registered us online and received an email confirmation.
This was roughly two weeks in advance of the event. Over the next couple weeks we got at least one more email as well as a phone call reminder of the event. I had selected the “minimal contact” option when I registered, so I didn’t get placed on some sort of list (that I know of).
Attending the Seminar
On the day of the event we arrived a bit early (they asked us to) and were escorted to a small room (actually the wine room) where they had a table and screen. Here’s a view of the set-up:
Over the next 15 minutes or so 7 or 8 other people showed up (I think it was three couples and one single guy) in addition to us, so there were 9 or 10 total. They noted that the night before they had a much larger turnout in a much bigger room.
We sat around a bit and were served drinks and appetizers as well as placed our orders. I looked through the presentation materials which consisted of a spiral presentation:
As well as this folder:
The folder had a workbook that went with the presentation plus a two-page survey about the seminar that we filled out at the end.
I read everything in between the time we got there and the time we ordered and had a good feel for it pretty quickly.
Once we had all ordered and started eating appetizers, the presentation began. A local financial planner got up, introduced himself, and welcomed us. He was the host and (I assume) the guy paying for the whole thing.
He introduced a man from Jackson National Life Insurance Company who would be our presenter. I’m not 100% sure what the relationship between these two was. My guesses are:
- The planner hired Jackson to do the presentation to help get clients.
- The planner does business with Jackson and as such Jackson offered the presentation as a way to get more clients.
Anyway, the presentation began and lasted about 30 minutes or so, during which time we got our food, started eating, and listened. I also took substantial notes and will cover the presentation in an upcoming post.
Just for reference, it centered on how to prepare for retirement from a non-financial standpoint. Basically how to not have a terrible retirement by thinking through issues and planning in advance.
End of Presentation Pitch and Questions
After the presentation was over, there wasn’t a pitch of any sort, which was a surprise to me.
The planner simply came up, said he hoped we enjoyed the presentation, asked us to fill out the survey (where we could leave our names and ask for a meeting if we wanted), and asked if anyone had any questions.
This is where the group opened up a bit, began to ask questions, and the planner responded.
I wrote down both the questions and responses and will share with you (along with my thoughts). Please realize these are paraphrased and summarized based on what I heard. I’m not attempting to create a transcript of exactly what was said as there’s no way I could have recorded it all.
Question: How important is it to go into retirement debt free?
Answer: It’s the most important thing. Retiring with no debt should be a primary objective.
My response: Can’t say I disagree, at least in principle. Having debt does make retirement harder. That said, I was surprised he said it should be a primary retirement objective. I would have had “having enough assets/income to cover retirement expenses” as the primary objective. Being debt free is a subset of that overall goal as it takes away a huge expense (your mortgage, which is usually the last debt to fall), thus making funding retirement much easier.
Question: What are your thoughts on long-term care insurance?
Answer: You may be self-insured if you have enough assets, but everyone else needs to consider how to address long-term care. The number one concern people have about retiring is running out of money — and having high long-term care costs is something that could significantly speed a person running out of money.
Not everyone needs long-term care insurance. We have four ways to address the issue so we tailor plans to a person’s specific situation.
But by age 50 you should at least be considering the issue and working on your plan for it.
There are some insurance policies that can also morph into LTC policies so those could be considered as well.
My response: I wish he had told us what the four ways of dealing with the issue were.
I haven’t spent enough time on this issue and need to think it through more. This was the first response that led me to consider setting up a meeting with this planner. More on that to come…
Taking Social Security
Question: When do you recommend taking Social Security?
Answer: How long do you plan to live? (Everyone laughed.)
The breakeven is roughly 80, so if you think you’ll live that long or longer, I’d recommend waiting until 70.
Even if you don’t think you’ll live that long, I would still recommend waiting at least until full retirement age (FRA) for almost everyone.
We look at models and advise people based on their needs. If they don’t need the income, then there’s usually no reason to take it early.
And, of course, there are many ways to take Social Security, especially if you’re married and both spouses have worked, so it can get complicated.
We have some clients who take it early because they think the system is broken and there will be changes that will lower their payouts. Our opinion is that there will probably be changes but they likely won’t hit most older adults as they’ll be left alone — the younger generation will get reduced benefits.
One exception could be means testing in which older, high-income adults do see their benefits reduced. So if you’re worried about this, you could justify taking it early.
My response: Here’s the second instance when I thought I might need to talk to this guy.
After thinking it over, my current plan is to have my wife take her Social Security when she turns 62. Then when I reach FRA (67), I’ll take my Social Security. She will be 70 and will convert to half of my benefit, which should be more.
But I need to chat with someone to be sure this is the best option for us.
Required Minimum Distributions
Question: How do you suggest thinking about required minimum distributions (RMDs) from IRAs?
Answer: Most people wait until the last possible moment to take RMDs because they assume their taxes will be lowest then. But we’re seeing many people have the same or higher tax rates at RMD time and thus being hit with large taxes since they have more to withdraw when they wait.
So we look at the person’s specific situation and oftentimes it’s best to withdraw earlier than the last minute to minimize taxes.
One way to avoid taxes is if you want to give you could send the RMD straight to a charity and thus have no tax liability.
My response: I assumed you could also send an RMD straight to a donor-advised fund and avoid taxes, which could have been a useable strategy for us.
But after checking into it, this is not allowed. Here are the details from Vanguard Charitable:
Up to $100,000 of your annual RMD from IRAs may be distributed directly to a 501(c)(3) public charity, enabling you to avoid paying income taxes on that amount. This option is known as a qualified charitable distribution (QCD).
The QCD applies to traditional, rollover and Roth IRAs. SEP and Simple IRAs also qualify (as long as you are no longer actively receiving employer contributions). Employer-sponsored plans do not allow for QCD treatment.
While we would love to offer our donors the ability to distribute their RMD tax-free to Vanguard Charitable, federal law does not allow donor-advised funds to accept QCDs. This is because the Pension Protection Act, which established QCDs in 2006, limited them to operating charities. For this reason, donor-advised funds, private non-operating foundations, and supporting organizations are ineligible to accept QCDs.
So we could give to a charity using our RMD, it would just need to be a gift straight to the organization, not through a DAF.
Question: What do you think about reverse mortgages?
Answer: They can work in limited situations but I generally do not recommend them. I’ve only had one client in 20 years use one.
I view reverse mortgages as a back-up to your back-up plan — only to be used if there are no other options.
Generally there are better options (like downsizing to a smaller house or even to a rental unit) than using a reverse mortgage.
My response: Yep. I can think of about 2,375 better options than taking a reverse mortgage.
And with that, he thanked us for coming and we left.
That’s the blow-by-blow of what happened, but what did I think of it (FYI, I asked my wife to write down her thoughts too, but she’s too busy to write for such a small site as this — haha!)?
Here are my main takeaways:
1. It was much better than I thought it would be.
I had expected a sleezy sales pitch featuring annuities, whole life insurance, or some other combination of high-cost financial products from someone who knew less about financial planning than my cat.
But this was actually a worthwhile presentation, especially for those not yet retired. The meat of the time spent (the presentation on how to plan in advance for a useful retirement) was very good IMO and something 75%+ of potential retirees need help with. So there was really good value here.
In addition, the Q & A time was worthwhile and valuable as well. Though his answers were pretty superficial (they have to be when talking to a group since everyone’s situation is different), they still offered some good insights even for a more advanced retiree like me.
2. The planner represented himself well.
I’m not sure whether I’ll contact him or not, but his strong responses to the questions posed (plus the way he handled himself — professional but approachable) would certainly make me comfortable suggesting him to others who might ask me to recommend a local planner.
I wouldn’t be surprised to find out he picked up several clients between the dinner the night before and our lunch, making the event completely worth the cost to him.
3. The food was good but not worth a return visit.
We enjoyed our food, but it wasn’t anything we need to visit again. It was slightly above average and my guess is that the prices were steep.
But we got to try out a place we thought we might like and now we have (and can take it off our to-visit list).
Based on the successful outcome of this event, we’ve signed up for another one in November (which is about a week from when I’m writing this post). It’s at a very swanky restaurant so I’m going to have to get dressed up (a bummer), but we have wanted to try out the place but can’t see ourselves spending that kind of money on food. Now we don’t have to. 😉
Plus I’m kind of hoping it will be a train-wreck. It would make for such an interesting blog post.
Anyway, stay tuned…