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Planning smart for retirement

MetLife's retirewise program is a valued employee benefit

By Elisabeth Boone, CPCU

As the first wave of Baby Boomers moves toward retirement, demand is high for tools and strategies they can use to manage their assets when there's no longer a paycheck coming in every two weeks. Younger people also want to plan ahead for a comfortable retirement and to provide security for their families, especially in light of the long-lasting impact of the severe recession.

Standing ready to meet the demand is a dizzying conglomeration of financial planners, consultants, banks, stockbrokers, and assorted self-styled retirement gurus. According to a recent survey by MetLife, however, the preferred retirement planning resource is actually employers, named by 72% of the respondents to the insurer's 2012 Annual Employee Benefits Trends Study.

As much as employers might like to provide retirement planning support, it may not be high on the list because it can be an expensive proposition. Faced with the ever-increasing cost of group health insurance and the uncertainties associated with implementation of the health care reform law, many employers continue to direct workers to the resources offered by the company's 401(k) provider. Although these resources can be helpful, employees are still on their own when it comes to examining alternatives and making choices. The voice on the other end of an 800 line may or may not belong to a knowledgeable retirement planning professional, and in any case the focus will be on the provider's products and services.

What if unbiased information and personal assistance with retirement and other financial planning not only was available at the workplace but also was provided at no cost to the employer? That's exactly how a MetLife program called retirewise works. This year marks the fifth anniversary of retirewise, and both employees and the insurer's field representatives are enthusiastic about the initiative.

Workshops and consultation

As the foundation of MetLife's PlanSmart® financial education series, retirewise is available to workers whose employers offer the insurer's group products. Designed for employees of all ages, the complimentary program is presented in a series of four two-hour workshops and covers a range of issues, including budgeting, investment principles, Social Security, and estate planning. Workshops are conducted at the employer's work site, and at the end of the four-part series employees can meet with a local MetLife financial professional to discuss their specific circumstances and goals.

Currently retirewise is available to insured companies with 500 or more employees; MetLife plans to expand the program's availability to smaller companies, says Jeff Tulloch, vice president for retirewise. "We recognize that a company with 100 or 50 employees has the same needs as a company with 5,000 employees," he says.

The four retirewise workshops are:

Building the Foundation. Participants envision their desired future and explore ways to finance it based on current and future retirement trends. The workshop covers financial basics and the importance of diversification.

Creating and Managing Wealth. Attendees examine how they may accumulate assets during their working years. They learn about investment strategies to manage market risk, such as asset allocation, diversification, and portfolio rebalancing.

Establishing Your Retirement Income Stream. Building on what participants have learned in the first two workshops, this session focuses on how to prepare before retirement to generate income during retirement. Attendees learn how to use their assets to structure an income stream to address their wants and needs in retirement.

"After each series of retirewise workshops, an average of 45% of participating employees take advantage of the opportunity to meet one on one witha financial planning professional." —Jeff Tulloch Vice President-retirewise Metlife

Making the Most of What You Have. A review of each participant's employer-provided benefits explains how they fit into that individual's retirement plan. Finally, participants are encouraged to start thinking about their legacy, after which they review the basics of estate planning.

"Retirewise is presented in a workshop setting, typically to a group of about 25 employees," Tulloch explains. "Each workshop is two hours long, and the series is presented over four consecutive weeks. This is a fairly meaningful commitment on the part of both the employer and the employees. We believe this commitment is worthwhile because the retirement conversation is complex and detailed, and it's essential to securing the future for employees of all ages."

Throughout the four-part series of workshops, employee participation goes beyond the two hours of each workshop, Tulloch says. "There's homework. We ask employees to think about their current budget, and we give them worksheets to list their income and expenses. Every attendee is given a workbook that they use throughout the series, and it's a valuable tool for employees to use when the series is over."

Like all of the workshops MetLife presents as part of its PlanSmart educational series, retirewise is delivered in a face-to-face format. "This is the primary model for our company because we know that, when it comes to understanding the issues involved in retirement planning, most people prefer a personal interaction," Tulloch says. "People may gather information online, but as they get serious about planning, they want to meet with a specialist face to face. We have a robust field force of financial professionals across the country who present retirewise workshops and are available to work with participants one on one after the series has been completed."

Field reps' greatest hits

The local field representatives who attend retirewise workshops are often asked to meet with individual employees to help them plan for retirement, and frequently they encounter unusual or difficult situations. The reps enjoy telling these stories because they so often have a happy ending.

Mangia Italiana! After attending a retirewise workshop in the Bay area, a rep set up a consultation with a woman who had been with her company for over 35 years and was close to retirement. Her father was an Italian immigrant, and the rep helped her envision the next stage of her life: spending time in Italy and visiting her relatives there. Through her work with the adviser she was able to buy a condo in the region of Italy where her extended family lived. She valued the rep's service because she thought that other advisers were concerned only with managing her assets and weren't looking at her situation holistically. One secret to the rep's success: He noticed the client had poor eyesight, so he made special preparations for their meeting so she could see and understand everything clearly.

Debt-free and back on track. Through a retirewise workshop, a rep in the Central area met a 45-year-old woman who literally was "drowning in debt," a situation she found both frightening and embarrassing. Between credit card debt and student loans for her daughter's education, she owed more than $70,000, making her unsure about her retirement and whether she would ever be able to live debt free. Exacerbating her hopelessness was the fact that the house she had bought for $210,000 was now worth substantially less than the balance owed on her mortgage. Within a month of working with her, the rep provided a set of solutions that used her current income to pay off her debt within six years. Since then she has created an emergency fund, no longer uses credit cards for unexpected expenses, and is on track to retire at age 66.

A sudden change. While attending follow-up meetings after a retirewise workshop, a rep in the Philadelphia area met a couple who laid out their plans for retirement. Six months after creating a plan that met their needs, the rep got a call from the wife saying that her husband had suffered a stroke that had severely impaired his memory. He would have to retire earlier than planned. As with many older couples, her husband had handled their finances, and he was no longer able to do so. The wife understandably found the process confusing and was worried about making a mistake. Through e-mail and phone conversations, the rep helped her through her husband's retirement process and allowed her to gain a comfort level with their finances.

Family ties. A rep met with a woman who was trying to organize her parents' assets. Complicating the situation was the fact that her mother was in the early stages of Alzheimer's. Making matters worse, the woman had followed bad advice and surrendered her mother's life insurance policies and moved the money into a brokerage account. Working with lawyers he trusted, the rep helped the woman straighten out the situation and then went on to help her secure her own financial position as well as those of her husband and two grown children. He meets with the couple several times a year to ensure that they are still on the path to a comfortable retirement.

In the five years since retirewise was launched, MetLife has conducted 3,700 workshops with a total of 71,000 employees. As the program celebrates its fifth anniversary, Tulloch anticipates continued growth and expansion. "After each series of retirewise workshops, an average of 45% of participating employees take advantage of the opportunity to meet one on one with a financial planning professional," he says. "This is a clear indication of the importance that employees of all ages place on planning for a secure retirement."

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