While discussing marriage and retirement with a group, an advisor raised a glass of water and asked, "How much does this glass of water weigh?”
After fielding the standard answers, the advisor said, "The weight depends on how long you try to hold it. If you hold it for a minute, that's not a problem. If you hold it for an hour, your arm will ache. If you hold it for a day, you'll have to call an ambulance.”
“In each case, it's the same weight, but the longer you hold it, the heavier it becomes. And that's the way it is with relationships in retirement. The longer you go without discussing your thoughts and plans and developing a set of shared expectations, the bigger and heavier the issues can become.”
“Sooner or later, unmet expectations or differences of opinion will turn into ongoing arguments or long-standing resentments and you won't be able to hold them. As with the glass of water, you have to put those burdens down in order to achieve the retirement you both deserve.”
This simple yet impactful story begs the question: What are you doing better and different with couples on the verge of retirement? What makes you stand out from other advisors? How are you adding value to this ever growing subset of clients and prospects?
In Breaking The Mold Part 1, I demonstrated the fact that everything seems to be changing except the way we go about our business. The same old song and dance routines are causing our industry to stagnate. As a result, fewer and fewer young advisors are joining our ranks, and industry media coverage remains mostly negative and focused on scams instead of what we are doing new, better and different.
To change the direction of our industry, we need to break the mold and begin innovating, rethinking the way we work with and add value to various client groups. If you’re like most advisors, the value-added conversation that usually takes place after a traditional retirement planning talk is about estate planning. And let’s face it, we could all rattle off why it’s important, what steps clients need to take, and the names of both local and national experts to help them.
Don’t get me wrong, the tried-and-true plans for durable and medical powers of attorney, wills, trusts, QTIPs for blended families, and ILITs for high-net-worth clients are all important, but these recommendations don’t make you better or different, nor do they move our industry forward. They just make us all the same, because it’s expected, not newsworthy nor engaging.
As an industry, we’ve all come to understand that estate planning is important because we see what happens to people who don’t do it. Not to mention, it’s one of the six keys to financial planning that’s been drilled into our heads. But who in the heck decides how many key areas there should be, and whether it’s time to add one or two more in an effort to reinvigorate our ranks and better serve clients? Why aren’t we questioning these old methods and embracing the fact that retirement has dramatically changed? Shouldn’t we be helping people plan for retirement beyond simply arguing about Monte Carlo simulations or whether the 4 percent withdrawal rate is safe or not?
That’s what cracks me up about our industry. Too many advisors blindly subscribe to stuff like this and assume it’s set in stone somewhere. I was a robot too at one point, but decided to stop being cliché and following the herd. In my opinion, advisors who want to do the same and break the mold, particularly with couples heading into retirement, need to add a seventh key area to financial and retirement planning: the mental and emotional aspects.
Just as caution is thrown to those who don’t organize their estate matters, if couples don’t take the time and energy to invest in their relationship, they will find that the effects on their family and finances can be equally devastating. Failure to address things like how much time they will spend together, changes in household responsibilities if one retires before the other, or how their golden years will be affected by financial issues such as supporting an aging parent or adult child can quickly remove the luster and shine from their golden years. Let me assure you and your clients, money can’t buy happiness before or during retirement, and misery loves company, especially when someone is stuck in the house all day with a spouse they’re angry of frustrated with.
What I know about retirement is that people have a tendency to create their own thoughts and plans regarding everyday life in retirement. The problem is they aren't always effective in communicating those thoughts and plans with their spouse, which is exactly where the danger lurks. If assumptions aren't discussed before retirement, they can quickly become points of contention and cause conflict.
In one of my workshops a women remarked, “I told my spouse that I married you for better or worse, but not for lunch every day.” The comment suggests that couples can, and probably will, have different priorities and attitudes about retirement and that identifying those differences is critically important to their compatibility, and success in retirement.
However, right now, too many advisors are part of the problem instead of the solution. Our industry focuses too much on conveying the ideal or perfect retirement instead of what is really going to happen. We help clients do lots of dreaming but very little in terms of managing the mental, social, and physical aspects of retirement. That has to change. We need to encourage clients to build strong, healthy relationships through regular communication and problem solving, because life, especially in retirement, can change course quicker than the stock market. If the relationship isn’t solid, nothing else will really matter.
Thankfully, the fix for our industry can be both easy and fun. Just as you don’t have to be an attorney to discuss important aspects of estate planning, advisors don’t need to become life coaches or therapists. Instead, you just need to get comfortable with the topics and develop resources that help raise awareness.