I could see it coming a mile away. I was at a traffic light waiting to turn left when I noticed two cars headed toward me at the intersection. It was easy to see that the second car was in a rush, tailgating the other vehicle as if to say, “Step on the gas, and let’s make this light!”
The driver in the front did not have the same style or agenda—he or she was following the recommended speed limit and approaching the light with caution. The light turned yellow. Driver No. 1 hit the brakes, while driver No. 2 hit the gas.
I don’t have to tell you what happened next because you’ve likely seen this happen yourself.
Like me, I’m sure you wish you could have warned them by shouting, “Slow down!” or “Brace yourself!” But that’s impossible when you’re confined in your own car, no matter how quickly you see the trouble brewing ahead.
Unfortunately, something similar can happen to clients heading into retirement. Whether they know it or not, a number of things can come out of nowhere and destroy their best laid plans. And advisors need to get better at both spotting the oncoming collisions and speaking outside the confines of their traditional roles where they focus only on dollars and cents.
According to the National Highway Traffic Safety Administration, car crashes are prevalent and costly:
• On average, the agency says, there are more than six million car accidents in the U.S. every year (there were 6.3 million in 2015 and 6.7 million in 2018). A figure of six million comes out to roughly 16,438 crashes per day.
• In 2010, the agency put the cost of automobile accidents in the U.S. at $242 billion per year, or an average of $782 per person.
• The administration says that 36,560 Americans died in automobile crashes in 2018. That’s 100 every day.
From my research and experience, the road to retirement offers its own dangers, and clients moving in one direction get smacked in the side by something they didn’t see coming. It’s not always as simple as getting T-boned by another car. Sometimes they get broadsided by something much slower: feelings of isolation and a lack of purpose. Their relationships with friends and family members change, too. All these things can make them feel run over, turned upside down or disoriented.
Clients can also get hit head-on by cancer, heart disease, Alzheimer’s or some other health issue. They might unexpectedly lose loved ones. They might be forced into roles as full-time caregivers. They might be victims of a fraud that can derail their picturesque dreams for the next phase of life.
So how can advisors see it coming? How can they identify the warning signs—and educate clients about what to do when it happens? Here are three things to consider:
Start A New Dialogue Now
In an article I wrote earlier this year called “Playing the Rebound,” I said the coronavirus may end up being one of the greatest turning points in the history of retirement planning. It’s an unprecedented time and situation because the effects of the pandemic—the market meltdown and subsequent panic—were not just financial. The damage has been personal too. Covid-19 has affected clients mentally, physically, socially and spiritually (as well as financially).
In other words, it has kicked open the door for a whole new mindset and approach to retirement planning, and it’s given advisors the opportunity to start having bridge conversations that connect the dollars and cents to their overall personal well-being.