“Please mom…I will do anything you ask…I will cut more lawns, paint fences, clean up the yard, and even do extra chores.” That was my sales pitch to my mom the first time I wanted to put something on layaway. I was 11 years old and spring shopping with her at JC Penny when I fell in love with a new bathing suit that had Great White Sharks printed all over it. 

The problem was, I didn’t need a new bathing suit, thanks to a never-ending array of hand-me-downs from my older brother. So, I begged and pleaded to try layaway, lamenting again that I would do whatever it took to get it paid off before summer break. Deep down, I just knew that a new swim suit would mean the best summer of my life, including more pool parties, longer days at the beach and squirt gun fights galore.

Now we have all been in situations like this where we think something new and special will make all the difference in our lives, even if it takes a payment plan to achieve it. After all, it’s pretty far-fetched to think that simply buying a new bathing suit could bring more friends and fun times, right? 

As adults, we know it’s absurd to assume that a material possession will change a kid's life, yet as advisors, we can set clients up to fail in a similar way by not discussing some of their own far-fetched ideas about everyday life in retirement. Like my summer delusions, many people think that the simple act of retirement will create the best time of their life. 

That they will spend long, perfect days with their spouse, reconnect and grow closer with kids and grandkids, lose some weight, get in better shape or start eating healthier. Maybe they will even write a book or better yet, volunteer at a non-profit and make a major impact. All good things that unfold in retirement, right?

Unfortunately, this stuff doesn’t just magically happen, primarily because many of the things people fantasize about in retirement are the very things they put on layaway leading up to it. I see it all the time. Clients put their health, relationships and hobbies outside of work on the shelf.

They store them behind the counter and assume a one-time deposit and occasional payment will keep them in good order until they make their final payment or reach retirement. Then they get there and are surprised to find these very things have fallen out of fashion, grown tattered or aren’t working the way they imagined.

This idea of clients putting their personal life in layaway until retirement is critically important because a major shift is taking place in financial services. More and more advisors are finally getting the message that clients not only want more than financial advice but need more. Retirement is a major life transition with a lot of uncertainties and unknowns, and simply making sure they don’t run out of money isn’t enough. Therefore, cutting-edge advisors need to do a better job of communicating to clients that using a layaway plan for retirement can be dangerous because of who it’s designed for.

The advent of layaway originated during the period of The Great Depression when a growing number of people did not have enough cash to make full payments for their merchandise. Retailers allowed customers to make payments over time and pick up the items when full payment had been made.

In the early days, it was common to use layaway for larger purchases like farm equipment or sewing machines. Over time, retailers made it available for a larger array of products including household items, toys and clothing. In fact, a 2017 report lists 55” TVs, outdoor trampolines, kids' scooters and diamond engagement rings as most common layaway items.

The concept of layaway remained popular until the 1980s and 1990s when credit cards turned the process upside down. We essentially moved from a delayed gratification approach to immediate consumption as consumers could now take their products home and pay later. This remained the trend until layaway made a comeback after the 2008-2009 financial crisis.

This concept and history are important because as advisors are called to develop non-financial coaching and counseling skills, or what I call bridge conversations, it’s essential for them to have a toolbox in order to bring home and emphasize key aspects of the retirement decision-making process. In the case of this article, stories or metaphors can serve as ideal tools to help clients see the need to not only plan beyond the dollars and cents but also apply to their personal life right away. 

That doesn’t mean I think every advisor needs to ask their clients if they have used layaway or if they may have put some important aspects of their life on the shelf until retirement. It’s just one of many ways they can start new, deeper, more meaningful conversations with clients. (See also Breaking The Warrior Mentality Of Retirement, Side Effects Of Retirement, Prison Breaks, Seat Belts And Retirement, and The Inoculation Of Retirement)

Back to the case of layaway, what clients need to understand is that the pay-as-you-go approach is typically offered to people with bad credit and very little disposable income. Now most of the people that advisors work with and who are 5-10 years away from retirement usually don’t have bad credit or lack of cash flow.

But again, that’s only if you are looking at things from a financial perspective. Clients closer to retirement often do have other credit or currency issues in terms of time, energy and planning. One of the most important things I train advisors to do is simply to ask clients to write down what a perfect day and week looks like in retirement. It’s transformative because for the first time, clients are being asked to develop a written plan for their everyday life and frankly, they can’t do it. They get to Wednesday and realize waking up, drinking coffee and reading the newspaper until lunch isn’t a very fulfilling encore life. It’s an important step in helping people take things out of layaway right now!

The point is, we have to stop classifying people based on their financial habits alone. Yes, we can look at and judge people based on their income, education, spending behavior and retirement savings. But frankly, we don’t do the same thing from a personal perspective. We don’t classify people as having poor, fair, good or very good scores when it comes to their health, social circle, relationships, and plans to stay relevant and active in retirement. We assume they can figure it out as long as they have money.

This approach reminds me of the accredited investor rule. Essentially, people with income between $200,000 and $300,000 and or that have a net worth exceeding one-million dollars are automatically considered investment savvy and can enter into complex contracts (non-registered securities). Simply because they reached certain financial thresholds. Frankly, this a major reason why many young professional athletes and celebrities fall into financial ruin. They don’t have the knowledge, skill or information to make these decisions and as a result, they get burned. Money doesn’t make people smarter or create happy endings. 

The same situation holds true for many clients approaching retirement. They have been brainwashed for so long that it’s only a financial decision and once they break certain thresholds, they are qualified to leave work and life will be great just because they saved enough. Retirement savings alone, won’t do that!

As a result, advisors need to introduce new ideas and methods for helping clients make better retirement decisions and transitions. That means we need to help clients to develop non-financial skills and habits that they can use right away. This can and should be done in a number of ways including one-on-one conversations, newsletters, books, videos, as well as seminars and workshops. 

Overall, layaway was the perfect option for me and my new swimsuit. When I finally got to pick up my shorts, I was excited to get home and try them on. Unfortunately, there were no extra pool party invites in the mailbox, my parents didn’t take us to the beach more often and the cheap squirt guns we could afford didn’t hold water for long. 

There is no doubt that clients are also excited to reach retirement, just be sure they haven’t put their personal life on layaway and that they have a written plan to replace their work identity, fill their time, stay relevant and connected, as well as mentally and physically active. 

Robert Laura is the president of Wealth & Wellness Group, the founder of RetirementProject.org and a pioneer in Certified Retirement Coach training. He can be reached at [email protected].