If you're like me, you've been hearing and reading about how life in retirement is different than it used to be; but what does that really mean, and how does the way it's changed affect those of us on the front lines meeting with clients every day?  I believe three things are fundamentally changing retirement:

Retirees are more closely connected to society than ever before.
Personal savings are playing a greater role in generating retirement income than in the past.
A new set of web based competitors are questioning the value that advisors truly provide.

Combined, the traditional nature of retirement is under attack and forcing advisors to become experts in more than just products and investment selection. 

Behavioral Change
Retirees no longer leave the workplace in hopes of disappearing from society as past generations did. Think about it. Once your grandparents retired, how often did you see or talk to them? For me, once Grandpa retired and moved to a sunshine state with Grandma, we saw them once or twice a year, and usually spoke to them only on special occasions. Whether you experienced something similar or not, today you see many more retired grandparents driving kids to and from school, lining the soccer and baseball fields on the weekends, and in some cases, housing adult children and parents.  

Outside of these ever-evolving family implications, the newest trend in retirement is not retiring. Instead, more and more retirees are turning a hobby or passion into a business, giving back by accepting a lower paying job at a not-for-profit they care about, or simply volunteering their skills to stay mentally sharp and socially engaged.  

Throw in cell phones, Facebook and Skype, and it's easy to see how retirement and income planning are changing as retirees become more accessible and in touch almost daily with their family, community and society in general. All of this may sound like a positive transition but, inevitably, for our industry it translates into further financial needs, i.e., more withdrawal requests of increasing size and frequency. In many cases , this is forcing advisors to develop and implement more liquid and flexible strategies to help retirees fund their rapidly evolving and more engaged lifestyle.  

It's important for advisors to understand these trends because therein lies the opportunities to create value and differentiate oneself.  If you bill yourself as a retirement income expert, you won't get far with just product knowledge and investment selection skills. Advisors should be able to identify and use all of the factors that are contributing to a client's situation to help them prepare both mentally and financially for this new phase of retirement.  

Static retirement planning that falsely projects 20-30 years of idyllic retirement won't differentiate you ... and may not help clients when they need it most.  Retirement and income planning is ongoing work, requiring regular revisions as a client's lifestyle and financial needs evolve.  I often compare retirement planning to marriage to help clients understand that they can't and should try to figure everything out about retirement on the day they walk out the door.  It would be like trying to have your entire marriage planned out of your wedding day. How'd that be going for you now?    

Psychological Change
Another trend that's changing retirement and income planning is the role of personal savings. A generation ago, people relied primarily on a pension and Social Security. They didn't have to worry about the stock market because they had reliable income streams to support their lifestyle, not to mention CDs and bonds paid a reasonable interest rate. Today, personal savings can make up to 50% or more of a client's retirement savings ... and they need those savings to consistently generate regular income. That's one reason I suggest advisors develop psychologically satisfying strategies to help reduce the stress and anxiety associated with this major retirement change. Retirees want to feel good about what they're invested in and to understand how the strategies are working for them in both good and bad market environments. After all, they do need something to post on Facebook or brag about to those buddies stuck in annuities or mutual funds that haven't budged in the last 10 years.   

Advisors seeking to develop psychologically satisfying strategies can learn from gamblers and alcoholics. That may sound farfetched, but remember, gamblers don't talk about how much they lost, they talk about how much they won. Alcoholics don't talk about the bad times, the reminiscent about wild nights and fun parties ... and every parent talks about the daughter on the honor roll rather than the son who was caught drinking and smoking. Clients are no different. They want something positive to talk about and discuss. That can come in the form of yield, return, or regular income payments. The scary reality is that if you're not providing them with something cool, interesting, or sexy to talk about, Jim Cramer will give them something to share and leave you lagging behind your peers who are embracing the change instead of ignoring it.