Looking at the problem of disappearing Social Security benefits from a different perspective just might reveal that better mousetrap you're looking for. (Photo: Shutterstock)
“Build a better mousetrap and the world will beat a path to your door.” If you have the opportunity to build a better path to success for others, you're likely to become their first stop.
This promise appeals because it alleviates an annoying anxiety that's perplexing a particular audience: millennials. They now represent the largest segment of the workforce, and they'll be here for a while. You can count on them sticking around long after you've retired.
Christopher Carosa, CTFA, is chief contributing editor for FiduciaryNews.com, a leading provider of essential news and information, blunt commentary and practical examples for ERISA/401(k) fiduciaries, individual trustees and professional fiduciaries.
So, what problem can you solve for them? It's not a current problem, like paying off student loans or budgeting to make ends meet. According to a recent Ernst & Young survey, millennials are most worried about Social Security not being there in retirement.
Let's narrow the audience from all millennials to those between ages 32 and 36 (this represents the oldest of the cohort). They're about to enter their prime earning years. They'll soon be discovering they can accelerate retirement savings to counter their concern about Social Security. That's something you can easily show them.
Is that the problem you can solve that'll keep them coming back for more until you're ready to retire? My guess is that this won't differentiate you very much from the competition.
Looking at this problem from a different perspective, however, just might reveal that better mousetrap you're looking for.
Nearly three in five women between the age of 32 and 36 already have children. Do you think they feel Social Security will be there for their kids? If they can't depend on Social Security for themselves, imagine what they think about the prospects of the government program existing when their children retire?
What if you told these millennial parents you could ease this particular concern for them? Do you think having one less worry about their children's future would make them sleep easier at night?
Here's the twist that seals the deal: Three out of five millennials in that age group have considered starting their own business. These are the folks to focus on. Why? It's easiest for this crowd to implement the one strategy that most likely will unshackle their children's retirement from any dependency on Social Security.
Minor children who work for a parent-owned business are exempt from payroll taxes. Let's say they start working for their parents at age 13 and earn $6,000 a year and continue through their 18th year. They won't have to pay any federal income taxes. If they put those six years' worth of earnings in a Roth Child IRA, without ever putting another cent in, and earning 8 percent a year until they retire at age 70, they'll retire with $2.5 million tax-free.
That's a major head start on retirement (and not needing Social Security). What parent wouldn't want that?
Now that's the kind of mousetrap people will beat a path to your door for.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
