Most advisors don’t spend their day thinking about how to jolt their clients, but I do. I have a unique perspective on retirement planning because prior to becoming a financial advisor I was a social worker. I worked with some of the most difficult clients and situations, facilitating individual, group and family therapy as well as serving many of my area's psychiatric hospitals for years. I worked with addiction, depression, suicide, sexual abuse, child-neglect, self-harm, crime and more.
It’s an experience that takes you to places and situations most can’t imagine and leaves you wondering how and why. On the bright side, social workers are trained in how to observe people because you have to document everything including body language, tone, mannerisms and word choices. As a result, I’m not only comfortable in uncomfortable situations, but I pay very close attention to how people respond to the various things I say and ask.
Additionally, I spent close to a decade as a trust officer, which gives you a very real look at death, money and legacy. So, I’m not sharing these statements for fun or to be crafty. They are retirement realities that advisors can use to jolt clients in order to start new conversations that will help clients better prepare for everything that retirement can bring with it.
1. Stop advising clients they need to “retire to something.”
2. The difference between todays haves and have-nots isn’t money.
3. Twenty of the 43 most stressful life events take place at or near retirement.
4. Why worry about a market crash when the dark side of retirement carries much greater risks?
5. The issue isn’t that people are living longer, it’s simply taking longer for people to feel “old.”
6. Without your memory, your life loses meaning.
7. Traditional estate planning is backwards and may be more damaging than no planning at all.
At first, saying any one of these statements may seem unnatural and out of your comfort zone … maybe even unprofessional in some cases. Which is why it’s so important for advisors to understand that retirement is one of the most sought-after phases of life but also is one of the most misunderstood. There is so much to it, that I have devoted my professional career to breaking the status quo of traditional retirement planning to include issues like these that go beyond the dollars and cents of it.
Harsh reality is, traditional retirement planning is fatally flawed because the current process doesn’t help people develop a written plan for the non-financial aspects. We leave it up to the client to figure it out, and they are just not equipped to do so in many cases. This is why we need to raise awareness around these other factors so our clients are better prepared when issues show up.
Stop Saying, “Retire To Something”
In my opinion, there is nothing worse than being cliché or saying what everyone else is already saying, especially if the concept doesn’t work. I can’t tell you how many people come to my workshops and say, “Once I retire, I’m going to eat better, exercise more, start a business or rekindle this hobby.” And guess what, when they get there, they don’t do it. Want to know why?
We are creatures of habit, and if your clients don’t start or establish them before they retire, they aren’t going to magically appear. Retirement doesn’t provide any extra energy or motivation. Yes, it offers more time and freedom, but without the energy, commitment and support it won’t matter. So, start telling clients to “Retire with something” so they don’t fall flat trying to change who they are and what they do when they get there! Start now.
The Difference Between Todays Haves And Have-Nots Isn’t Money
It used to be that money was the key differentiator between the haves and have-nots, but as our society ages, money takes a back seat to those people who are active in life, engaged with others and feel relevant. Research suggests that active people with a strong social network are happier in retirement and have the ability to not only live longer, but also delay the onset of things like heart disease, Alzheimer’s and dementia.
The new haves understand that true wealth isn’t defined by the almighty dollar but rather the impact that they are having with and on others. So they invest in their health and relationships, and aren’t afraid to use their savings to create a better life now instead of waiting until later.
Twenty Of The 43 Most Stressful Life Events Take Place At Or Near Retirement
Can you imagine starting a meeting with a client by saying, “Did you know 20 of the 43 most stressful life events take place near retirement? In fact, retirement itself is listed as the tenth most stressful life event?”
Most clients don’t necessarily associate stress with retirement but when you think about it a number of issues do arise:
• Leaving work identity behind
• Moving or downsizing
• Lost friendships from work
• Changes to their daily routine
• Loss of a family member or friend
• Health issue
• Divorce
• Kids leaving home
That’s just a few of the stress factors that can converge on new and existing retirees and a major reason why people can feel out of sorts or overwhelmed in the first few years of retirement.
Once again, this is why we have to start having these conversations with clients. By creating more awareness, people can recognize when they are having trouble and seek out help and support. Too often people suffer in silence because of the stigma associated with retirement, i.e., that it’s supposed to be this perfect time where everything goes as planned and works out well. But what happens if it isn’t? Who do clients turn to without feeling like they will be judged or criticized?
Why Worry About A Market Crash When The Dark Side Of Retirement Carries Much Greater Risks?
It’s very common for clients to ask what will happen to their life savings if there is a market crash, but few know that retirement can invite more expensive and frightening things like depression, anxiety, addiction, and in some cases, even suicide.
Nobody likes to talk about this stuff, but when you or a loved one come face-to-face with it, recognizing the warning signs, having resources and finding support becomes more important than surviving a market correction.
Advisors don’t need to become social workers, but rather take the role of quarterbacking one step beyond working with an attorney and CPA and form relationships with professionals who are trained to deal with non-financial retirement issues.
The Issue Isn’t That People Are Living Longer, It’s Simply Taking Longer For People To Feel “Old”
The whole idea of people living longer is a broken record. Everyone seems to have gotten that message. The problem is, no one knows what to do with it. In fact, most people assume living longer means they will be less capable for longer periods of time. But that’s not necessarily true.
The issue at hand is that people are reaching traditional retirement age and don’t feel old. They may be 62, 65 or even 70 but they feel, and in many cases even look decades younger. This may sound great, but it’s actually very confusing for people because no one is out there giving clients permission to use some of their retirement savings or other investments to re-invent themselves, switch careers, go back to school or start a business.
People have been trained for so long to work until their 62 or 65, that not doing so leaves people feeling out of sorts. Some people wonder if others will think they haven’t saved enough, don’t want to spend time with a spouse or simply don’t have a life outside of work.
Which is why we as advisors need to usher in this new era of thinking by giving people permission to stay young, at work and engaged at whatever level they want until they don’t feel like doing it anymore.
Without Your Mind, Your Life Losses Meaning
Think about it, what gives your life so much value and meaning? It’s your ability to recall fond memories, make new ones, recognize people and places, while appreciating new things and experiences. Once that capacity is gone, so too is the foundation for what gives your life meaning.
That means when we talk about more common forms of protection such as life insurance and long-term care, we also need to address brain health. There’s no need to bring up the amygdala or the medial temporal lobe. Simply emphasizing the role that our minds play if living life to the fullest and pointing out that crossword puzzles and Sudoku won’t be enough can be a great place to start.
Traditional Estate Planning Is Backwards And May Be More Damaging Than No Planning At All
Put another way, there is no point in helping clients pass on their wealth, if you don’t help them pass on their wisdom. The real truth is that wealth does not create wisdom, however, wisdom has the ability to both create and maintain wealth.
Therefore, effective estate planning needs to start with defining family values, beliefs and traditions. This can be accomplished in a number of ways, but it’s most often done with an ethical will. These are not legal documents but allow clients to get clear about what’s important and what they truly want to pass on. Once that is done, the money stuff becomes much easier to figure out.
Overall, these statements can be useful in jolting clients to think and prepare differently for retirement. By creating more awareness around topics like these, advisors have a powerful way to start new conversations as well as a chance to make a positive impact on a client’s personal life in retirement.
Robert Laura is the president of SYNERGOS Financial Group, the founder of RetirementProject.org and pioneer in Certified Retirement Coach training. He is speaking at Financial Advisor's Inside Retirement conference in Las Vegas on September 26 can be reached at [email protected].