I was updating a bedroom closet at our cottage and I cut the final board a couple of inches too short. Immediately, I began to rationalize the idea that the board would work fine because no one would see it unless they were standing all the way inside the closet and it wouldn’t affect the area where the hangers and such would go.
While cutting a new board would be a slight pain, I decided to do what any wise man would do: I called my wife. I walked her through the situation and my rationale for using the short board. She thought about it for a second and said, “It’s OK. It will be fine.”
I agreed, but asked again, “Are you sure?”
She was slow to respond and I was hesitant to break the silence because we were both thinking the same thing: “Do it the right way.” So we did! We took the extra time and put in the additional effort to make it right.
This same concept is important to retirement planning, because too often people find ways to rationalize their retirement decision when everything may not be right. They may be the right age, have the right amount of money, but they can come up short in other areas.
For financial professionals, that means knowing what it takes for people to get retirement right and finish strong. In other words, we can’t send people into retirement with the idea that it will be fine or OK, only for them to see a problem once they are fully retired. We have to be ahead of the curve, and unfortunately most advisors aren’t.
I realize that’s not a very welcoming message. (“Hey! You don’t know what you need to know about retirement.”) But if someone doesn’t call you out and nudge you in a new direction, how will we get there as a profession? So I’ll be the bad guy and tell you that getting retirement right means helping people plan beyond the dollars and cents. More than 80% of what it takes to successfully retire has nothing to do with money, yet most firms focus almost 100% on the financial side of things.
What I have found is that retirees who made a good transition have found a way to accomplish six distinct things. They have:
1. Replaced their work identity;
2. Filled their time with meaningful tasks;
3. Stayed relevant and connected;
4. Kept mentally and physically active;
5. Expressed their spiritual beliefs; and
6. Felt financially secure.
The more of those things that are checked off in retirement, the greater level of satisfaction a retiree will feel. Furthermore, retirees who go into retirement with a plan or specific strategies to accomplish all six will feel satisfied much sooner. Typically when people have their money right but not the other more personal factors, they waste the first three to five years trying to figure it all out. Financial security is important. But people often find out too late that they would likely give all the money they’ve saved in exchange for the knowledge they had family, friends, good health and more time.
I know what some of you are going to say. You do talk to people about more than money and you do have very personal relationships with them. Maybe you even consider yourself holistic or comprehensive and reference retirement readiness or wellness. But let me call your bluff.
If I go to your website and LinkedIn profile, what does it say you are an expert in and interested in? Money, right? You likely don’t have a credential that says otherwise. Your blogs, guides, news feed and short videos likely don’t talk about developing a retirement plan addressing the mental, social, physical or spiritual aspects of life after work.