Too often people take this type of planning for granted and wrongly assume that it will just fall into place. But that’s not the case and once again, we can turn to science for this. There is something called the Homes Rahe Scale, which list life’s 43 most stressful life events. Most people have no idea that 20 of those 43 items can take place just before retirement or in the early phases of it. In fact, retirement by itself is listed as the 10th most stressful event.
In other words, it’s a major transition that people, financial professionals and corporate America can no longer take lightly and hope that it works itself out.
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, 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. Furthermore, 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.
Currently, the traditional retirement planning process is backwards because it focuses first on money and not the more human elements. Over that next several years, I expect more financial organizations to see the fatal flaws of this approach and to come to terms with the idea that running out of money pales in comparison to running out of family, friends, health and time.
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].