SMS White Paper Reveals New Importance of Social Insurance to Consumers and You

  • Originally published June 23, 2015 , last updated April 27, 2021
  • Medicare, Social Security
SMS White Paper Reveals New Importance of Social Insurance to Consumers and You

Rather than ignore Medicare and Social Security as government entitlements that don’t need strategy and planning, financial and insurance professionals should make them the foundation of retirement planning if they are to avoid putting clients at risk of running out of money in retirement, a new Senior Market Sales® (SMS) white paper finds. But the percentage willing and qualified to offer this type of advice remains low.

The New Foundation of Retirement Planning: Social Security and Medicare” explains the risks of doing nothing as well as the opportunities for those acting ahead of the trend. Get the free white paper.

SMS examined a broad spectrum of data, from consumer surveys and demographics to financial planning industry reports and economic data. Collectively, the data uncovered an unmet consumer need that could cause a dramatic shift in the financial planning landscape at an especially challenging time, as the industry faces dwindling numbers of veteran advisors and the rising threat of robo-advisors.

“Independently, each survey and report that we looked at provides valuable insight, but this is the first white paper to piece those trends together to show how they’ll impact the practice of retirement planning,” said Chris McDonald, Assistant Vice President, Director, Annuity and Institutional Sales at SMS. “Clearly, all these forces together are elevating the roles of government-administered social insurance programs in the lives of those facing retirement, and that means financial advisors will need to adapt.”

The white paper shows that many people rely on their Social Security check to pay for their health care but that retirement health care costs are on a path to exceed Social Security benefits. Soon-to-retire workers who in good times focused on investing to supplement Social Security, now see Social Security with a new importance as they face rising health care costs, longer life expectancies and longer careers. They also will approach their Medicare election and health care spending with greater scrutiny. Baby boomers are more health-aware than previous generations and more dependent on social insurance due to losses of investments and sometimes entire pensions after the Great Recession.

As a result, financial advisors will be increasingly pressured for strategies that boost Social Security income, control health care expenses, and creatively arrange and draw on investments and other assets to extend retirement income. At the same time this influx of baby boomers demands these new services, the financial planning industry is losing veteran advisors faster than they can be replenished. Financial advisors already report feeling stretched too thin, and they must find creative ways to survive in a less-wealthy, more-automated world.

“These realities can no longer be ignored,” McDonald said. “Smart Medicare and Social Security choices are the first steps to building a successful retirement plan.”

The white paper identifies possible solutions to help you meet the growing demand for these new services.

SMS developed Total Social Security to help independent insurance and financial professionals identify their clients’ best Social Security claiming strategies and guide advisors on how to incorporate Social Security into overall retirement plans. Qualifying professionals receive training, live support from Social Security experts, FINRA-reviewed marketing materials, and software which calculates the best claiming strategies for clients.

SMS also partners with Medicare BackOffice®, a team of insurance agents licensed, contracted and certified in all 50 states to provide Medicare advice and products. Financial and insurance professionals refer clients to Medicare BackOffice so they can continue to focus on their area of expertise while remaining their clients’ main advisor.

Download the white paper.