If your retirement planning process is simply about having x dol- lars at x age, then you are doing nothing more than helping clients prepare for what Mitch Anthony has called “the artificial finish line.”
Life does not end or begin at age 62. Many clients are working in ca- reers that they don’t particularly enjoy with the hope that they can put away enough money to do what they want at age 62. These peo- ple must believe that life begins at age 62. Others are preparing only in fiscal terms for retirement from their work at age 62 and are mak- ing no plans for how they will utilize their time, knowledge, and en- ergies past that point. These people are grossly underprepared for life past the age of 62. The retirement planning process can and must adapt to the reality that there is a lot of life left to live for today’s retiree, and then begin using processes and services that better at- tend to this reality.
Michael Stein, author of The Prosperous Retirement, suggests that retirement is a “time in life where an individual shifts from earning 11 / Redefining Today’s Retirement 113
a living for the sake of economics to contributing to society with the goal of self-realization in mind.” Retirement for baby boomers will become a classic animation of Maslow’s “Hierarchy of Needs” as people move their minds and money up the pyramid toward self- actualization. Tomorrow’s planner will be found engaging in conver- sations with two types of self-aware clients: (1) those who want mean- ing and balance in their lives and can afford to retire; and (2) those who want meaning and balance in their lives and cannot afford to retire.
In the next chapter, we will talk about the place that work will hold in the lives of both these types of clients. Just because one client can afford to fully retire does not mean that he should fully retire. It is important for everyone to consider all that is gained from work be- yond the paycheck if they are interested in pursuing meaning and achieving balance with their lives. For many people who have the means to retire, engagement in work (paid or unpaid, part-time or full-time) that challenges and energizes them will be the key to a happy, rewarding, and satisfying retirement period. Those who can- not afford retirement will need help exploring a work-life situation that will help them find the expression of meaning and attainment of balance they desire, while also providing the necessary income for the lifestyle they desire.
The conversation clearly needs to move from how much money we will need to reach the artificial finish line to how do we design the kind of lives our clients hope to live once they reach that line. Even better is the conversation that helps clients remove the artificial fin- ish line and starts to work on transitioning to a life that works now.
This will help the clients pursue interests they love at a pace they can live with. Research indicates that only 15 percent of preretirees are interested in the traditional retirement experience. How are you going to help the other 85 percent redefine retirement for them- selves? (Roper Starch Worldwide press release. Commissioned by the AARP. “Baby Boomers Look toward Retirement.” 2 June 1998, 1–5.) Tomorrow’s retiree will have no interest in being finished.
For the conversation to move past a pot of gold at the end of the artificial finish line, clients must be made aware of the differences be- tween the retirement model of yesterday and that of today. The con- versation between the advisor and client needs to move to the realm of self-actualization, which is how the majority of prospective retirees are beginning to view the period of retirement. However, it is important to keep in mind that this redefinition of retirement as a time for self-
actualization is not restricted to the 60-plus crowd. Self-actualization seems to be a driving force for baby boomers and also foundation for the career decisions of the generation X population.
The redefinition of retirement raises a number of issues for both advisor and client to establish a dialogue around. Consider the ques- tions in Figure 11.1.
11 / Redefining Today’s Retirement 115
FIGURE 11.1 Thinking It Through Exercise 1—My Views about Retirement
Yes No I’m counting the days until I can retire.
Yes No I expect my retirement to be very different from what my parents experienced.
Yes No I don’t want to retire “cold turkey.”
Yes No I worry about not having enough money when I retire.
Yes No I wonder what I am going to do with my time when I retire.
Yes No I worry that Social Security will not be available when I retire.
Yes No I haven’t thought much about what I want to do when I retire.
Yes No I like being productive and would like to continue working after I retire.
Yes No I’m worried that my health will fail when I retire.
Yes No I have a clear vision of how I will invest my time and energy when I retire from my current position.
Exercise 2—Personal Reflections
1. What I most look forward to about retirement: ______________
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_________________________________________________________
_________________________________________________________
_________________________________________________________
2. What I am most concerned about in retirement:
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
The list of issues raised because of the redefinition of retirement is expansive. We covered these more comprehensively in Chapter 6.
What is important is to realize that redefining retirement ultimately forces the redefinition of our products and services and how we in- terface with the client.
Ross Levin, CFP, of Accredited Investors, Inc. in Edina, Minne- sota, relates a retirement transition story that fits quite well with the model of self-actualization as the target rather than just attaining a set amount of money at a certain age. Ross tells of a 53-year-old client who sold his business, but had concerns about his investment assets supporting his lifestyle. Rather than going back to work in the same industry, Ross’s dialogue with this client led to this man taking a posi- tion in the public service sector, which was something he had always wanted to do. Despite the cut in salary, he is “in the black” both at the income and self-actualization levels. When faced with this scenario, how many advisors would simply tell the client the number of addi- tional years he would have to work to build his retirement nest egg?
The above client is entering phase one of what may be a 40-year retirement journey. It is vital that the client work with an advisor who understands this model of retirement living and offers as many op- tions for self-actualization and personal fulfillment as possible. The goal is more than monetary. Tomorrow’s clients will measure their progress in life more by their self-worth than their net worth, and more by what they contribute than by what they keep.