Last week the country of Denmark once again set in place an increased age for receiving government sponsored retirement benefits.  As you can see in this article those citizens of Denmark born after 1970 will not be able to access this benefit until age 70 — up from the current age of 67, with gradual increases to the 70 mark moving forward.

 

As you may know, the United States, in most instances, lets citizens receive pre-retirement benefits at age 62, full benefits at age 67, and increased beginning benefits at age 70.  For each year that one delays taking those benefits an increase of 8% on your beginning benefit is earned. Here’s a chart on how those benefits might look like at different ages for someone set to receive $2500 of benefits at age 62.  (Note:  Annual Cost of Living Adjustments are not figured into the Cumulative Value at Age 80)

 

Initial Age	Initial Monthly Value	Cumulative Value at Age 80
62	$2,500	$540,000
67	$3,967	$618,852
70	$4,997	$599,640

 

While the United States life expectancy rate for children born today sits at 77.4 years overall, the life expectancy rate for someone who has lived to age 65 sits at 83 years for males and 86 years for females.  So, calculating only until age 80 may be short and one who collects the higher amount at age 70 may eventually pass the 67 year old in lifetime benefits as they continue to age.

 

While I picked the $2,500 figure somewhat out of the air, according to the Social Security Administration, maximum initial benefits for today’s retirees in 2025 are $2,831 at age 62, $4,018 at age 67, and $5,108 at age 70.

 

How Does the Retirement Age and Life Expectancy figure into your Preneed Marketing?:

I will give you a couple of thoughts on how I looked at Preneed marketing and what worked for us.  To understand my thought process you need to know that I came into the business world the same year that Ronald Reagan became President and First Lady Nancy Reagan staunchly supported an anti-drug program in the United States named “Just Say No”.  Part of the “Just Say No” program was to educate children at younger ages than ever before about the negative aspects of illicit drug use.  The thought process was letting them know at younger ages simply gave more awareness and importance to the program.

 

• I picked up on that younger and younger education and eventually realized that we should not simply be waiting for people to walk in the funeral home door who had been told that setting aside money for an eventual funeral was a way to legally “spend-down” to help with government paid nursing home care.  Oddly enough, prior to about 1980 the thought of “soliciting” people to pre-fund their eventual funeral was thought of by many funeral operators, including myself, as potentially bad public relations that could harm your business.

 

• About 1990 we became bold and started sending out mailers for funeral pre-arrangement to those 65 years of age and older.  Prior to that it was only the insurance companies themselves who sent out the mailers.  That thought process kept the funeral home from looking “too solicitous”.

 

• In 2001 we started doing monthly small-group, one-hour seminars, aimed at those 65 and older.  We bought mailing lists, composed the letter ourselves, and offered a $20 restaurant gift certificate per couple for attending and found, through trial and error, that if we sent out 200 mailers, we would have about 10-12 couples attend which was not too many . . .  but our closing rate on those couples was about 70% — meaning we sold about 12-16 policies from that meeting.  We used a very simple in-house developed questionaire that led couples into asking for an appointment with a pre-arrangement counselor.

 

• One thing we learned over time was to pre-screen our mailing list and as we refined it our results became even better.  I remember that one of the big items that we screened for was “home ownership”.  People that didn’t own a home did not get an invitation to a seminar.

 

• At that time we were doing about 160 at-need cases per year so the seminars brought in about 70-80% of our at-need volume.  We realized that this would grow volume over time.

 

• A few years later we experimented with the Nancy Reagan philosophy of trying even “earlier ages” and was surprised at the number of still-working couples who took a morning off of work to attend the seminars upon invitation.  We also moved our philosophy of saying this is something “retired people” should plan for to bringing a mantra of “when you are starting to think of retirement, you should not only plan for when you will take Social Security, but you should also think of your will, your legacy, and your funeral arrangements”.   A big part of our seminars was the suggestion telling potential clientele that they should have serious discussions about their choice of cremation or earth burial and where the permanent memorialization of their cremated remains or casketed body would be.  We found this “optionality” of decisions moved people to the discussion stage.

 

• I found that having the discussion about permanent memorialization probably moved more people to pre-arrange than did the discussion of cremation/earth burial.  In many instances family lots were in different cemeteries and the couple needed the discussion to decide which to make use of. . . . or, our closest National Veterans Cemetery was 140 miles away and a discussion about using that cemetery versus a local cemetery often was a reason that couples took up the conversation.

 

• Over the years we were able to move our preneed business to a situation where we had a one to one ratio with at need calls which I think, in today’s world, should be a minimum ratio for businesses that want to grow.

 

• While we did have acquisitions to increase our call volume, the decision to make Preneed as big a priority as At-need played a major role in our organic growth over time.  My brother, Dave, took on this mantle and it went from a part-time gig to a more than full-time one when we needed to hire a 2nd part-time agent to folow up on seminar leads.

 

Funeral Director Daily take:  My direct take on the question posed in the title of this article is that retirement age should not affect pre-need.  My reason for saying that is because you should already be prospecting the “before retirement” cohort of potential clients.

 

On the other hand, it may make a slight difference on the potential client’s reaction to your lead generation.  They may think that “they have plenty of time to do this” because retirement is far off.

 

If you don’t do monthly seminars I would suggest a call to my friend Patrick Zalusky at Laker Planning (507.327.6938) to get some pointers on how to start.

 

More news from the world of Death Care:

• Mitchell Funeral Home enters 3rd generation of service in Chelsea.  The Sun Times News (MI)
• An ex-Harvard Medical School morgue manager admits his role in theft of human remains.  The Times Union (NY)
• Why the Army feels safe resuming use of horse-drawn funeral carriages at Arlington National Cemetery.  Video story and print article.  CBS Evening News
• AM Best removes from under review with negative implications and affirms credit ratings of Homesteaders Life Company.  AM Best

 

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