Traditional retirement planning is fatally flawed. These detrimental faults aren’t recent discoveries; they have just become more noticeable and are spreading like a wild fire. The problem lies in many of its underlying principles, which assume that:
Clients don't like what they do for a living.
They don’t enjoy or need the mental, social and physical aspects of work life.
Buying their freedom from work won’t enslave them to other things such as poor health, damaged relationships or lack of purpose.
They can actually save enough money to avoid working for the next 20-30 years while maintaining the same standard of living.
Couples want to spend more time together, understand how their roles will need to change, agree on how to direct retirement savings and that their individual needs for social interaction are in sync.
It’s an interesting list because it’s common to hear how the retirement landscape is changing, but it’s not often translated into how it may be, or already is, impacting our firms and business models.
A terminal diagnosis like this is never easy to take, and while some advisors may seek a second opinion, the symptoms are obvious and far reaching. Factors such as social media, longevity and health-care costs are just a few of the elements that are driving the proverbial nails into the traditional retirement planning coffin.
Social media is playing a key role in the transition, but not because it offers advisors the opportunity to reach prospects and clients like never before. Instead, it’s the result of people finally having both the means and a desire to talk about retirement with others.
If you think about pre-Facebook generations, like the parents of baby boomers, they stressed self-reliance and a philosophy that suggests a person was weak or incapable if they couldn’t take care of themselves or figure it out on their own. They didn’t openly talk about their problems or family life. They just accepted it or worked around it, shrouding much of their life in secret.
Baby boomers, on the other hand, are openly talking about everything retirement, including all the gory details. They are coming to understand that life in retirement isn’t automatically better or easier unless they take steps to make it that way. Therefore, advisors need training, tools and resources to help clients plan for the non-financial aspects of life in retirement.