The same idea holds true for retirement. Advisors can no longer provide clients with compartmentalized plans. In other words, investors cannot institute certain rules for investing, mandate specific habits for saving, and in the process, sacrifice their hobbies, health, marriage and friendships.
Both clients and advisors need to know that they can’t put undue faith in the financial aspects of their retirement plan because at some point there will be a breech in other areas of their life. It could happen on their first day of retirement or 20 years into it, but rest assured, there will come a point when their lack of habits and discipline in the non-financial areas of life will be brought into question—and money won’t be enough to save them.
Too Big To Fail
At the time, the Titanic was the most expensive and luxurious ship ever assembled. It cost an estimated $7.5 million in 1912 dollars, the equivalent of $180 million today and appeared to spare no expense. It boasted 10 decks, and first time features including a swimming pool, Turkish baths, squash courts and a gym. Mainstream media and people marveled at its size, lavish style, and put those who could afford to sail on her in a very exclusive group.
On paper, it was the place to be and people aspired to be a part of something so big and grand. But money mattered very little on April 15, 1912 when people realized the only thing the ship builders skimped on were the lifeboats. Regretfully, there were only half as many lifeboats as were needed for all of the passengers and crew. The lifeboats had actually been constructed and installed but were removed at the last minute to reduce the “clutter” on the first-class promenade deck. Primarily because they assumed they would never be needed.
Advisors can make similar assumptions when it comes to retirement. Too many clients walk out of an advisors office believing that they will have 20-30 years to do what they want, when they want. But nothing could be further from the truth. Retirement’s greatest tragedy is that every retirement comes with only one true guarantee: At some point, every single ship will go down—and money, possessions and other things will matter very little.
In retirement, lifeboats come in the form of good mental and physical health, strong relationships, social connections and spiritual confirmation. Advisors must not only begin coaching and helping clients add more of these, but also make sure that the ones they already have remain in good working order.
Follow Your Own Path
It’s been said that one of the primary reasons for the Titanic disaster was the fact that White Star director Bruce Ismay ordered the captain to abandon caution and race to reach New York in record time. One person’s plan combined with a moonless night which made icebergs very hard to see, jeopardized the hopes and dreams of thousands of people and families.
When it comes to helping a client chart their way to, and through retirement, many advisors are following someone else’s ideas and directions. They are stuck on old and outdated beliefs, racing to add more clients and assets under management. They haven’t taken the time to heed the warnings of the icebergs that can sink clients. They’re focused on setting some new record or personal best, when it’s time to be focusing and serving clients, even if it takes a little longer to get those new assets into port.