As financial professionals we juggle a variety of retirement planning assumptions, including inflation, rates of return, tax brackets and even life expectancy. However, an emerging set of assumptions, if left unresolved, can have a negative impact on a client's retirement and your relationship with them.
A recently retired client was running behind for our meeting. His wife however, arrived on time and was noticeably irritated. I invited her back to my office, poured some coffee and asked, "So how are things going?"
That simple question unleashed a barrage of complaints, illustrating her sense of frustration over how her husband was managing his time and routine ... and thus their relationship. Our conversation ended abruptly, but without closure, when he walked into the room. It wasn't the first time I'd encountered this situation, but also I knew it was necessary to address the issue now instead of inviting similar comments into future meetings.
The reality is, everyday life in retirement comes with its own assumptions and stereotypes. People often create mental thoughts and plans regarding it, yet they aren't always effective in communicating them, which is exactly where the danger lurks. If, for example, assumptions such as when you'll wake up, if you'll eat every meal together, how often you'll watch the grandkids, and household responsibilities aren't discussed before people retire, they can become points of contention and cause conflict later on.
Many of these potentially damaging assumptions and stereotypes can be resolved by encouraging clients to have proactive discussions with each other, family members, and friends regarding their specific day-to-day retirement plans. By doing so, clients will strengthen both their communication skills and the relationships that will nurture them during retirement-two major attributes that are often overlooked and typically not planned for.
The following are ten questions advisors can share with clients to help them initiate retirement conversations, gauge expectations, eliminate what remains unclear, and build more meaningful relationships.
1) What does your perfect day and a perfect week in retirement look like? Consider what time you will wake up and go to bed; if you'll eat breakfast, lunch and dinner together; what errands and household responsibilities need to be done each week and who will do them; and discuss how much alone time each of you may want and need.
2) What does your job provide that you will miss in retirement? Think about the mental, social and physical aspects of your work that are important to you and what steps you can take to either maintain or replace them.
3) How will you identify yourself during retirement? Reflect on the last time you were introduced to a retired person. How did they identify themselves? What was your first impression of them?
4) What will you do with your time during retirement? Assess whether or not you will need to maintain a structured schedule or if you can effectively go with the flow. Be mindful of the fact that too much structured time can lead to the dark side of retirement including addiction and depression.
5) How will you stay connected with friends who are still working? Be sure to consider how moving or spending extended time in a distant location would impact both family relationships and friendships.
6) How will your retirement plans affect your family? Be sure to discuss if there will be more or less visiting, what role you will play with your grandkids, and how will you communicate your plans to your family.
7) Do family, friends or organizations expect or desire any inheritances? Think about what conflicts might arise with your heirs, and if you have a blended family, how assets and possessions be divided.
8) What thoughts, questions or concerns about retiring keep you awake at night? Whether it's running out of money, losing a loved one, or how you'll stay connected to friends, seek out professionals who can help you eliminate the stress.
9) What impact would the time, energy or cost of supporting an adult child, grandchild or parent have on your retirement budget and lifestyle? These issues are becoming all too common, so prepare by considering which family members are likely to ask you for money, move back home or move in with you. Set ground rules for the amount of money with which you can help, or how living arrangements might work.
10) What role will your physical and mental health play in your retirement? Consider what healthy habits you hope to incorporate into your retirement and what bad habits need to be monitored or curbed?
These questions can be a great starting point for developing open and healthy communication patterns between couples. They can also serve as critical building blocks to rely upon should retirement plans change. Whether it's a stroke, car accident, or addiction, there are a myriad of things that can alter retirement. All of which make having healthy relationships as important as a traditional dollars-and-cents plan.
Hands On Or Hands Off?
In dealing with the softer side of retirement, advisors can choose to be hands on or hands off. You can facilitate a simple, hands-off approach by adding questions such as these to your financial planning forms or, once they start working with you, as a "discuss-at-home" homework assignment. This approach benefits the "quants" and left-brain oriented financial professionals because it allows them to raise client awareness, yet stay firmly rooted in the numbers, charts, and graphs.
On the other hand, the right-brain, social types of our profession can engage the client more directly by asking some of these questions during actual meeting times. Whether it's during the data-gathering phase or after you've delivered your plan recommendations, basic questions such as these can help clients see the importance of thinking beyond just the numbers and, of course, reinforce the benefit of working with a concerned/knowledgeable advisor.
Either way, some ground rules for clients are important. After all, this isn't the typical type of stuff, like "You never put the toothpaste cap back on," or "You always put the toilet paper on the wrong way."
Rule 1: There is no universal answer for any of the questions. Every answer you provide is correct.
Rule 2: The goal is not to convince or sway the opinion of your significant other; it's simply to share your individual thoughts and feelings
Rule 3: Listen openly to your partner's point of view and ask questions for clarification instead of making assumptions.
Financial professionals can add significant value to a client relationship by helping them plan for and avoid issues related to everyday life in retirement. By doing so, you will strengthen your own relationship with clients while helping them establish healthy communication skills and nurture relationships that can withstand retirement challenges.
As for the couple I was assisting, after we discussed their portfolio I simply said I was interested in helping them build both a financially and personally secure retirement. I suggested they take a few minutes to discuss how life in retirement is the same and different from before and gave them each a worksheet with the questions and ground rules. I shared that I would be willing to go through the questions with them or they could discuss them at home, emphasizing the importance of planning for more than just the financial aspects of retirement.
Robert Laura, president of SYNERGOS Financial group, a Michigan based RIA, is the author of Naked Retirement and is the co-founder of the RetirementProject.org. He provides Retirement Wellness Workshops for individuals, organizations, and employers. He can be reached at [email protected].