“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.

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