I’ve heard the war stories many times. Whether it was boredom, addiction, divorce, starting a business, aging parents or spendthrift adult children, it’s not uncommon to hear about clients who fail at retirement.  Unfortunately, much of these discussions center around symptoms rather than root causes. 

As a result, advisors need to take steps toward helping clients become aware of the factors that contribute to a slow or failed transition into retirement. I have found four root causes associated with a wide variety of retirement failures. They are:

Vague Assumptions

One of my favorite retirement statistics suggests that 70 percent of pre-retirees think that life will be better in retirement, but only 40 percent of actual retirees find that it is. The reason for this is because a growing number of people carry vague ideas and assumptions with them into retirement. They think everything will be fine and easy to figure out. But that’s not how it works.

Retirees quickly figure out that there is nothing easy or automatic about retirement. It doesn’t just magically unfold for them. They realize they have to develop a new identity, be flexible and find new ways to connect with family and friends. They have to take some initiative in order to stay active and out of the refrigerator, and keep themselves busy so that their thoughts don’t wander and turn into shopping impulses or sarcastic rants on politics. 

The impact that these vague assumptions can have on a client’s retirement often show up in plans to volunteer and/or work part time. Many retirees have an ideal schedule in mind, however, it doesn’t always match up with an employer’s needs. In other words, there are very few jobs available from 10:00 a.m.–1:00 p.m., three days a week, with no weekends and summers off. Not to mention the pay is not commensurate with the clients work experience, education or skills. Volunteering can follow a similar path. Some retirees may feel compelled to help out or be a part of a local non-profit but quickly find the work isn’t as fulfilling or impactful as they hoped. 

Another example where vague assumptions can play havoc on client’s retirement is with real estate decisions. Initially, buying a new lake home a few hours away may sound charming and peaceful. Their dreams of coffee on the deck, family weekends on the boat and short walks to downtown are finally coming true.  However, after a soccer and baseball season for the grandkids, they realize they’re spending more time in the car than at the house.

Role Ambivalence

There are several internal struggles that can take place during both a client’s decision to retire, and once they actually get there. Advisors can think of role ambivalence as a tug-of-war that takes place with a client’s thoughts and feelings—leaving them unsure of what to do or how they fit in. 

This concept can be examined in the context of a buyout offer where factors such as a herd mentality and peer pressure can muddle up the decision to take it or not. I realize the topic of peer pressure is usually reserved for middle school and high school students, but it’s also alive and well in retirement.

When a client is a certain age, their spouse or friends are all retired, and people at work are wondering why they’re still there, clients can become ambivalent about the situation. A part of them feels like they should retire (and maybe even deserve to), yet they like what they do and don’t necessarily want to walk off into the sunset yet. They can rationalize the benefits of both with no clear-cut winner.

Another place role ambivalence can show up is at home with couples. Whether both spouses worked, or one stayed home, retirement can disrupt long standing roles, beliefs about those roles, as well as daily routines. Regrettably, many couples haven’t been instructed to discuss how household chores may need to change or how a family need for caregiving may change the way things have been done for the last 30 years.

It’s not uncommon for some retirees to think that they deserve to do nothing after decades of hard work and that everything should remain the same. Others may feel they can do a better job of grocery shopping or paying the bills, or that a wall chart should be used to track duties and daily spending. Since there is no right answer, and attempts to help out only seem to make things worse, a retiree can become confused with where they fit in at home and create friction instead of peace of mind.  

Talent And Skill Reversal

We live in a strength-based world, where the things we do well are supposed to add value to our lives and those around us. However, retirement has a way of turning concepts like this on their head. With talent or skill reversal, one or more of the primary functions or strengths that a client possessed while working, turns into a void or weakness and causes stress, fear or anxiety in their everyday lives.

For example, the former chief financial officer who kept the company books and spending under tight controls can’t stick to a budget and withdrawals too much in his/her first few years in retirement, or the mechanic who can’t diagnose and fix a medical condition that makes him feel run-down all the time. The list goes on to include charismatic and outgoing sales people who struggle to connect with friends or develop a consistent social calendar, or the engineer who could organize people and plans for an office building or community park, and has decided to put those skills to work at home by reorganizing the spice rack and recommending a more efficient route to the grocery store. Both of which infuriates their spouse who has been doing things a certain way for their entire married life. 

People generally don’t go into retirement expecting their work assets to become a liability, but since everyone has painted this rosy picture of retirement where everything is going to be alright as long as they have enough money, they are caught off guard by it. 

Poor Communication

The primary reason for most retirement failures can be traced back to poor communication, or the inability of a client to share what they are thinking and feeling about this next phase of life. The issue at hand is that the term retirement conjures up different definitions and expectations for everyone. 

An adult child may assume that since their parents are wealthy enough to stop working, they can afford to support them or finance their dreams. Siblings may feel that since they have more time, they should be taking care of mom and dad more, and friends may suggest that keeping in touch and making future plans are on them since they have the luxury of sitting around and doing nothing all day.   

That’s why it’s so critical that clients discuss what retirement really means with those around them to help set clear expectations and boundaries. As you might expect, this is even more important for couples. Both generally have their own thoughts and ideas about what retirement will look and feel like, the problem is, they haven’t taken the time to discuss them and find middle ground. As a result, arguments and disagreements come about more frequently and require very little fuel to get started.

It’s also important to point out that married clients struggling with a retirement transition may need a third party to help them address or resolve issues with poor communication. A coach, counselor or therapist can often help couples get on the same page, as well as help other family members understand the clients position and point of view. 

Overall, failing at retirement is often characterized as an issue with money or attributed to an event like a divorce, failed business or cost of adult children. While those are very real factors that can impact a retirement transition, advisors need to be ready to dig deeper and become more aware of the root causes of these issues.   

Robert Laura is the president of SYNERGOS Financial Group, the founder of RetirementProject.org and the creator of the Retirement Wellness Marketing Program for Advisors. He can be reached at [email protected].