Retirement is often depicted as an idyllic life of leisure filled with a contentment and joy. Whether you have visions of long walks on the beach, worldwide travel, quality time with family, or turning your memoirs into a New York Times best seller, retirement is just like any other phase of life. It can come with a dark side that is not usually discussed and rarely planned for.
This topic came about after a casual conversation with a local doctor. After I outlined the premise of my new book, I asked him if there was anything he observed in retired patients that I might be missing. One of the biggest issues with retirees, he said, is addiction. Surprised, I asked him for more details and subsequently began my own research.
I can tell you that I was stunned by what I discovered. There is a hidden epidemic taking place in the shadows of retirement. As the data and my investigation suggest the need for financial professionals to develop skills and techniques that help clients prepare for much more than just the financial aspects of retirement.
A Chilling Prescription
It is expected that, by 2020, the number of retirees with alcohol and other drug problems will leap 150% to 4.4 million-up from only 1.7 million in 2001.
According to the Substance Abuse and Mental Health Services Administration, the proportion of older people treated for a combination of cocaine and alcohol abuse tripled between 1992 and 2008. For this group, in 2008, cocaine abuse was the leading cause of admissions involving drugs (26.2%), with abuse of prescription drugs a close second at 25.8%.
An Emotional Recession
The National Institutes of Health reports that, of the 35 million Americans age 65 or older, nearly 2 million suffer from full-blown depression. Another 5 million suffer from less severe forms of the illness.
Women are at a greater risk for depression because of biological factors such as hormonal changes and the stress that comes with maintaining relationships or caring for loved ones or children who are ill.
Health conditions, including heart attack, stroke, hip fracture or macular degeneration, and procedures such as bypass surgery can also trigger the onset of depression.
Depression is the single most significant risk factor for suicide among the elderly. Sadly, many of those who commit suicide did, in fact, reach out for help - 20% see a doctor on the day they die, 40% the same week and 70% the same month.
The Ultimate Crash
Suicide is the 11th leading cause of death in the United States with an aggregate rate of 11 suicide deaths per 100,000 Americans. Suicide rates are highest among people over the age of 65, according to the American Association of Suicidology (AAS). That age group makes up 12.5% of the population and accounts for 15.9% of all suicides.
White men older than age 65 take their own life at almost triple the overall rate, and are eight times more likely to kill themselves than women in the same age group. Perhaps surprisingly, white men age 85 and older have the highest annual suicide rate of any group-51.4 deaths per 100,000. In contrast, the rate for white women peaks between ages 45 and 64 at 7.8 deaths per 100,000.
As surprising as this information may seem, the threat of addiction, depression and suicide become even more real as you examine their contributing factors. For example, baby boomers were the first generation to engage in the widespread use of recreational drugs, and the first group for which a wide variety of prescription medications were readily available and culturally accepted as treatment for nearly every ailment. Baby boomers are also at a critical stage in life where stress can mount due to natural aging, bodily dysfunction, grief and loss, and the financial strain that often stems from caring for both aging parent(s) and adult children/grandchildren.
This shadowy downside of retirement appears to be exacerbated by the fact that today's seniors are from a generation that stressed self-reliance ... a trait characterized by a reluctance to discuss financial and or personal/health matters. This attribute, coupled with additional research, suggests that contemporary seniors tend to blame themselves for their illnesses, don't want to be a burden on family, and worry that treatment will be too costly. This serves as further evidence that life in retirement is like an iceberg, where 90% of what really takes place lies below the surface and out of mainstream conversations and retirement planning.
The Bright Side
Creating a successful transition from the workplace to life in retirement requires people to embrace the fact that for every hour invested in traditional retirement planning an equal amount of time should be spent on issues such as:
Replacing one's work identity
Establishing a healthy and active lifestyle
Staying socially connected and involved
Resolving relationship wants and needs before they turn into points of conflict
Through two key exercises, I've been able to successfully help people shift their retirement planning focus from dollars and cents to everyday life in retirement. The exercises include the development of both a curious list and a non-financial savings account.
Inquiring Minds
Big issues facing new retirees include what to do with their time and how to replace their former work identity. Both can be addressed initially by developing a "curious list," which is simply a list of things that people are curious about and at some point during retirement would like to learn more about.
What makes a curious list different from a "to do," "honey do," or "bucket list?" Specifically, it does not require any formal commitment of time or energy. Instead, it simply identifies subjects you would like to explore further at some point in your life. The value of this exercise lies in the fact that curiosity creates motivation, and the ensuing new experiences and knowledge can be useful in the accumulation of personal and financial worth.
A good curious list should support a balanced retirement, which includes mental and physical health, social activities and financial well-being. An added benefit of going through this exercise in a group or workshop setting is that it can stimulate a "retirement brainstorming" session where people exchange ideas and potentially increase their own list. I suggest clients have a list of at least 20 "curious" items before they actually retire.
Saving Grace Account
Most financial experts preach the importance of having a rainy day fund or three to six months of expenses to cover emergency or unexpected costs. The same concept should be applied to your personal life in retirement. A Saving Grace Account cushions you when a challenge such as the loss of a loved one, financial hardship, an unforeseen medical diagnosis, or difficult decision leaves you vulnerable to the dark side of retirement. I suggest identifying three to six different people you can count on for mental, physical and spiritual support. This support network can be just as important, if not more important, than a financial savings account.
Start by having clients list their family, friends, professionals and organizations with which they have a relationship and can rely on for help and support during emergencies and unexpected life events. Have clients identify who they can turn to when times get tough. Who can they call when they're feeling down and need a pick-me-up? Who provides wise counsel or time-tested advice? Who might they turn to for financial support? Who would help them move into a retirement community or nurse them back to health after a knee, hip or shoulder replacement?
There are a number of other exercises to help clients better prepare for life in retirement, but the first step, obviously, is to bring its dark side out from the shadows and make people aware of it. I believe the information and data presented here only adds to a financial professional's value and reinforces their need to acquire new skills to help clients make a successful transition from work to retirement. It also helps our industry to look beyond the customary network of attorneys and CPAs and incorporate the wisdom of professional therapists, doctors and non-profit resource groups.
Robert Laura, president of SYNERGOS Financial group, a Michigan based RIA, is the author of Naked Retirement and is the co-founder of the RetirementProject.org. He provides Retirement Wellness Workshops for individuals, organizations, and employers. He can be reached at r[email protected].