As I reflect on another year of retirement planning conversations, I’m reminded of how complex retirement has become. It requires an intricate balance among personal and financial needs, goals and desires. It’s seen as one of life’s goals, yet for the unsuspecting and unprepared, it can turn out to be anything but a cherished reward.
The following is my list of retirement musings, mined from the conversations I’ve had with individuals, families and groups this year, things advisors should consider as they lay out plans for both their clients and their practices next year:
1) Retirement success isn’t what you think. A successful retirement isn’t one without problems, but one in which clients learn to overcome them. Too often, retirement is portrayed as a utopian phase of life, void of pain, suffering and heartache. But crossing this magical line does not eliminate stress, remove relationship issues or motivate you to live healthier.
Advisors may know these things, but the ideas are often groundbreaking for clients. The conversation with those clients must first acknowledge that true independence and freedom come from managing life’s trials, not just one’s investments.
2) Retirement isn’t just about money. One of the greatest tragedies about retirement is that too many people are concerned more with what they own than with who they are. A person may retire with all the financial resources needed to maintain a certain standard of living, but money won’t buy love, health, family or friends.
A client’s attitude can shape both his perceptions and actions. By empowering clients to make the most of everyday life in retirement, advisors can better prepare them for a smooth transition as they seek to replace their career identity, make new friends outside of the workplace and stay fit and capable. For this, they need to develop a personal plan to replace the things work provided for them: self-worth, deadlines and relevancy.
3) Retirement is about managing feelings. Advisors often warn clients against the dangers of making “emotional” investment decisions, contending instead that successful investing is guided by good habits and self-control, not by whims and knee-jerk reactions. The same advice should come to bear when clients make certain requests -- to change beneficiaries, withdraw more money or support adult children.
Feelings not only slow down and muddle the investment process, they also pollute a client’s retirement. Feelings by themselves aren’t always reliable and positive; they can betray and deceive clients who don’t understand underlying causes or what actions can be taken to change them.
4) Retirement goals are not everything. The retirement savings crisis that America faces has created another problem. We have created a society that worships the dollar amount it takes to create the perfect retirement. Once again, money has an important role in retirement, but it’s essential to look beyond the numbers and consider what clients may be trading off for those precious dollars and cents.
At the end of the day -- or their lives -- very few people ask to be surrounded by their stuff as they breathe their last breath. Remember, it’s not what clients have that shapes their lives, it’s what they do consistently.
5) Retirement is a working paradox. Retirement’s great paradox is that the very thing people think they are leaving behind is required to propel them forward. Retirement takes work. Nothing about retirement is automatic. It takes, among other things, time, energy and practice.
This seeming contradiction can get lost in the shuffle during traditional retirement planning. But it’s important to explain to clients that they may be busier in retirement than they were when employed, at least if they want to make sure that their money lasts and that they remain fulfilled and connected. This is actually a welcome aspect of retirement, however, for clients who have a hard time doing nothing.
6) Retirement doesn’t take place on paper. On paper, a lot of things can look promising: a sports team’s starting lineup, a business idea or an upcoming event. But as the game starts, things don’t always work out as planned. Just as no couple can plan their entire marriage on their wedding day, a person can’t plan his or her entire retirement. It’s an ongoing process to which one must become acclimated and learn from over time. That’s not being negative, that’s being realistic.
Success in retirement is truly the result of good judgment. This often means learning from difficult experiences, the result of missed opportunities or bad decisions. Only by experiencing the difficulties of life and going through the transition that retirement presents each day can clients truly appreciate the freedom retirement offers.
As you approach another year of retirement planning, don’t build your practice on the shifting sands of numbers and returns but on relationships and service. Never surrender to what is deemed acceptable; seek out the ways that go against the grain and challenge the status quo. It’s essential to our industry that we get people to do what they resist doing so that, later on, they will become everything they want to be. What’s life’s ultimate treasure? It isn’t retirement; its wisdom applied to one’s everyday life.
Robert Laura is the creator of the Retirement Wellness Report, co-founder of RetirementProject.org, and author of Naked Retirement. He can be reached at [email protected]. Please connect with him on LinkedIn and follow him on Twitter @robertlaura.