There was a time when people thought that the earth was at the center of the universe and that the sun and other planets orbited around it. But over time, people found inconsistencies in this belief and began to not only question them but also use science to foster new ideas and realities.
Back then, controversial views that went against mainstream assumptions or biblical interpretation could mean imprisonment or even death. In fact, Nicholas Copernicus waited until he was on his deathbed to publish his theory that the sun was at the center of the universe despite discovering the concept years earlier.
Fortunately, in our time, challenging the status quo isn’t met with such a harsh reality, however there still seems to be a tendency to hold onto old and outdated ideas. For example: the one-dimensional belief that retirement planning is primarily a financial event with money and insurance at the center of it all.
Fact is, just as Copernicus began to reconfigure the role and positions of the planets, waves of research and studies are also shaking up traditional ideas and concepts in retirement. The new revolution in retirement planning puts an individual’s personal needs and wellbeing at the center, which in turn puts the need to plan for the financial aspects in a new and different orbit.
Like all great scientific discoveries, research plays a key role in validating theories and building new methods and practices. In the case of retirement wellness, none are as important as the Harvard Study of Adult Development. It tracked the lives of over 700 men for some 75 years. The findings from the study provide some of the hard data the industry needs in order to start seeing and doing things differently.
At the very core, the study concludes that people who are more socially connected to family, friends and community are happier, physically healthier and live longer than people who are less well connected. As you might expect, those who are more isolated and have fewer connections are less happy, see their health and brain function decline sooner, and ultimately, they live shorter lives.
But it doesn’t just end there and imply more connections are better. Researchers also found that strong relationships play a role in protecting brain function. Participants who reported feeling “securely attached,” meaning they could count on another person in times of need, had their memories stay sharper for longer, while those in an insecure situation, experienced earlier memory decline.
Talking about the strength of a client’s social network and their brain doesn’t always fit into the traditional data gathering process that advisors use, and even the new fiduciary rule won’t improve that. However, as we seek to do what’s in our clients best interests, we need to begin to examine more than asset allocation, income needs, and behavioral finance… and references to comprehensive or holistic planning need to include aspects of longevity and healthy aging as we embrace the notion that happiness and well-being in retirement are dictated by things such as relationships, mobility and brain functionality, not just dollars and sense.
This is important for advisors because this new era of retirement planning and coaching is changing demographics and social norms. Most notable, the distinction between the haves and have nots. In the past, this group was distinguished by economic means. People with money were the haves and those without, fell into the category of have nots.
Now the game has changed. The haves are people with their health. They have the mobility and functionality to do, see, and be part of things. The have nots are watching from the sidelines, and you guessed it, getting more isolated and end up being less connected than the haves.
Like the past, the gap between the haves and have nots is growing. One study I came across found that 40 percent of baby boomers report that it was difficult for them to kneel or stoop, stand for two hours, walk one- quarter mile, climb 10 steps without resting, sit for two hours, lift and carry 10 pounds, reach over their heads, push or pull a large object, or grasp small objects.
That’s a startling statistic because many of those things play a crucial role in how people measure the success of their retirement. The way I read it is that 40 percent of people are going to struggle on a vacation that requires some walking, standing or holding onto a rail. It means people are going to find it difficult to play on the floor or in the grass with their grandchildren, and that things like gardening, biking with a friend or watching a movie may be less enjoyable than ever before. The evidence is clear, having a functional body in retirement has to be of equal, if not more value, than having the right savings and asset allocation.
Advisors can have an immediate impact on their clients’ well-being by making sure they instruct clients to “retire with” something. It’s been said time and time again that people need to “retire to” something, but that causes delays and doesn’t address the fact that we are what we do each and every day. In other words, the way for clients to stay mobile and avoid falling into the have not category is to retire with good health habits. By establishing healthy eating habits along with an exercise routine and quiet time for personal or spiritual reasons, it’s much easier to continue them in life.
Too many people retire with the idea that they will start doing these things once they are done working, but retirement doesn’t come with any extra motivation or energy. In fact, it magnifies what people already are and do. So, advisors need to be aware of these and other things that have been shown to play a role in not only increasing one’s life, but the value they find in the extra time.
Another important topic I don’t want to leave out is how a client’s brain plays into the world of retirement. To start, a survey by Home Instead Senior Care revealed that older adults fear Alzheimer’s disease more than any other life-threatening illnesses, including cancer, stroke, heart disease and diabetes. Frankly, none of them sound good, but if you have seen someone “disappear” before your very eyes due to Alzheimer’s or dementia, it’s downright frightening.
Peeling back the layers, it’s easy to see why more and more people will continue to fear this disease and the loss of their memory. Basically, our memories make our lives meaningful. In other words, our memories define who we are and how we perceive the world. Without our memories, we begin to lose our identity and our connections, and with that, the ability to find personal satisfaction in life as we age.
What we know is that our brains need a good supply of blood and oxygen to function effectively. That makes regular exercise a crucial factor in lowering one’s risk for Alzheimer’s. However, if a client can’t exercise or chooses not to, it not only puts them at risk for a less meaningful retirement, it’s not only likely to make them more isolated, but also decreases their longevity.
Overall, the new science of retirement planning demands that advisors adopt a new set of beliefs and practices where a client’s relationships, mobility and mental health become the center, or main foundation for planning in this next phase of life. It suggests that advisors will need to acquire new skills in order to effectively touch on these topics with clients to ensure they “retire with” something as well as avoid being placed in the “have nots” category.
Additionally, advisors have a unique opportunity to see this as more than a new trend or obligation for extra training. Advisors who develop practical ways to help clients stay mentally sharp, feel connected, be part of something bigger, and provide ways for them to see and experience new things (memories) will have an entirely new and attractive brand of service to grow their business like never before.
Be sure to check out my most recent webcast with FA-Mag: The New Era of Retirement Coaching
Robert Laura is the president of SYNERGOS Financial Group, the founder of RetirementProject.org and pioneer in Certified Retirement Coach training. He can be reached at [email protected].