It’s common to hear that Covid-19 has changed people, business and our economy. But financial advisors might ask what specifically has it done to retirement planning? What things are affecting financial professionals and clients the most? In Part 1 of this story, I outlined three key factors for financial professionals, including their need to provide social proof of their trustworthiness and commitment to their communities, to work on screen skills that make their online meetings feel warm and professional, and to seize the opportunity to use more personal marketing to connect more deeply with clients.
Now, in Part 2, I’ll turn to things that are most likely to affect clients who are near or already in retirement. These things are important to both clients and advisors as they struggle against some trends and embrace others while emerging from the pandemic.
1. Isolation-ism. Among the trends our society needs to raise awareness about are the feelings of isolation among older adults. The pandemic required us to keep safe social distance from seniors and put strict limits on visiting them in care facilities. And people likely made it worse on their older family members by opting not to visit. The seniors bore the brunt of this divide. They now have fewer social outlets. And they are forced to use technology for social interaction, even though they have less comfort with it and capacity for it.
This means billions of dollars will need to be poured into housing and other facility technology to make sure seniors can stay connected every day with family, friends and medical staff. We don’t need new technology; we need existing technology to be more available to seniors. I suspect that we’ll see the emergence of professional technology aides who will function similar to nurses or home healthcare aides. These technicians could make regular home visits to ensure that older Americans’ audio and video technologies are up to date, connected and functioning properly.
Such changes could transform the long-term-care industry. As healthcare and family care move more online, people’s technology use may become an essential activity of daily living, and a technology aide could become a necessary retirement benefit.
2. Pods. Research tells us that social networks are among the most important things helping people make a smooth transition to retirement. But the pandemic has changed people’s social behavior. On one extreme, they’re wearing double masks, limiting their grocery shopping to curbside pickups and venturing out only for bare essentials. On the other extreme are people who think the whole pandemic is a hoax, refuse to wear a mask and have no problem traveling across the country, staying in hotels and Airbnbs. As a result, people are forming “social pods” that allow them to pick and choose whom they want to be around and associate with.
I recently reached out to a few friends about an annual golf trip we take each spring. The roster of people who usually attend doesn’t change much from year to year. But this year some people stipulated that their attendance depended on others’ mask and vaccine ideology.
Your clients need to be aware of how these changing dynamics may affect family events, annual traditions and other social gatherings. Many people already compartmentalize their relationships and choose whom they see and hang out with, but pandemic life has taken this to a new level. Many clients may feel left out because of their social media comments or because of the way they’ve chosen to deal with the virus.
Since many people hope to spend time with family when they retire, advisors can help by talking with clients about the ways different family members have responded to the pandemic. It might help to refer the clients to outside therapists, counselors or retirement coaches to lay some groundwork for decisions about masks, vaccines and visitation schedules.
3. Subscription drawdown. We’ve heard about the ways people’s life savings can get drained by healthcare costs or the spending habits of their adult children. But consider the things people pay for every month: the subscription costs for Netflix, Hulu, Amazon Prime, satellite radio, home security, computer backup, computer security, internet, newspapers, gym memberships, meal services or wardrobe boxes. These things can seem equally consuming.
Remember the old days, when clients paid a handful of companies to manage all the services they needed? Nowadays, people might be juggling a dozen or more different memberships. Many of these subscriptions start out free or at a low-cost trial rate. But after a month or two, the cost can easily double, if not triple, without any real warning. The memberships are likely tied to a credit card and automatically deducted every month unless you cancel.