Retirement's Dirty Laundry

Mitch Anthony

Whether your clients can’t afford to retire right now, or they’re already there, it’s important to help them understand that traditional retirement isn’t the nirvana they may think it is. When they do finally get to that fork in the road, it’s critical that they know which path to follow.

Money is only valuable in the way we use it—to improve our quality of life. Millions of people run full speed into retirement with great anticipation only to have their expectations break down in various ways because they failed to anticipate the nonfinancial challenges such as boredom, alienation, disillusionment, loss of direction—even premature death. I’ve heard dozens of stories of retirees who got less joy out of traditional retirement than they had bargained for because they weren’t prepared. There were those who died within a year of retiring because they lacked purpose in their lives, and others whose happy retirements were quickly spoiled by tension at home.

Most of these and other retirement disappointments can be anticipated and avoided if clients have the opportunity to view their retirement through a more holistic lens. Clients have heard plenty about investing their money properly for retirement but still don’t hear enough about investing their time, energy, and skills. Here’s what author and journalist John Wasik has to say:

Instead of absorbing an obsolete view of retirement, we should consider what I call the New Prosperity. This includes a flexible life plan that provides for your financial, vocational, physical, emotional, and spiritual needs. Unless you look at your future holistically, merely saving up a pile of money will be a meaningless act.

The economy may have taken a toll on many of your clients’ portfolios, leaving them with a smaller portfolio than they had hoped. Regardless of whether they are truly financially independent or not, at some point they are going to have to transition from one phase of life into another. Your clients need to be prepared for what that means for them beyond the balance in their IRAs or 401(k)’s. The following list delineates the aspects that contribute to a contented life in retirement:

1. Intellectual engagement
2. Productive pursuits (both paid and unpaid)
3. Leisure/recreation
4. Health care and physical fitness
5. Close relationships
6. Community and social relationships
7. Home and location
8. Personal growth
9. Financial wellbeing

As you can see, financial wellbeing is only part of a successful second half. Which of these categories is your client sufficiently prepared for? Have you ever seen one of your clients who had plenty of money, but allowed his physical health regimen to soften because he was unchallenged? How many fail to obviate the lack of psychological satisfaction equated to leaving work behind? How many are realistic about where they want to live in retirement? How many have thought about the important relationships they will leave behind if they move to a new location or the new relationships they will have to form in their new environments? All nine aspects contribute to a fulfilled retirement for retirees and their partners. If one party is not happy in retirement, chances are that this discontentment will taint the vision their partner had of retirement living as well.

Advisors have told me of a number of not-so happy commentaries from clients who were struggling to adjust to the nonfinancial aspect of retirement. Here are some examples:

• An advisor heard a 67-year-old retired executive lamenting about his boredom and subsequent disillusionment with not being needed anymore. The advisor commented that this scenario struck him as sadder than the person nearing retirement with an insufficient nest egg. It is one thing to lack money––it is altogether another to lack purpose.
• The wife of a retiree confided to her advisor that her husband was driving her nuts sitting around the house all day. She also feared that his health was declining.
• A retiree commented that his dream of retirement life in a warmer climate was souring due to the difficulty his partner was having adjusting to a different social and cultural environment.
• A retiree took early retirement to start a business that ended up as a psychological and financial nightmare for her family.

The stories are manifold, but the underlying theme is the same: many people are entering their retirement years with too narrow a focus. A person’s fulfillment with retirement living will not hinge solely on investment account balances.

When approaching retirement, clients analyze their portfolios of retirement income sources, double-check their companies’ retirement benefits, reevaluate their insurance needs, and so on. Their satisfaction in retirement, however, ends up being derailed by factors other than financial circumstances. In retirement preparation, money may be treated as the end all instead of being used as a tool for achieving goals in all other areas of life. The most satisfied retirees have anticipated their lives in retirement and not just their cash flows. Consequently, they are living the best years of their lives—instead of being disappointed by a modern day mirage.

As financial life planners, it’s important to have a defining conversation with clients to help them understand that they need more than means—they also need meaning. As a result, your clients will live a more fulfilled life, you’ll have a satisfied client, and that client will refer future business your way. Times are tough for everyone…clients need you now more than ever.

Adapted from Your Clients for Life:  The Definitive Guide to Becoming a Successful Financial Life Planner by Mitch Anthony.  ©2006 by Mitch Anthony.  For more information, click here.

Mitch Anthony is the founder and president of the Financial Life Planning Institute, the leading provider of financial life planning tools and programs. 

For more than a decade, Mitch and his team have provided training and development for both individual advisors and major organizations throughout the world. Mitch personally consults with many of the largest and most-recognizable names in the financial services industry on both financial life planning and relationship development.

Mitch has been named one of the financial services industry’s top “Movers & Shakers” for his pioneering work, and is interviewed by the media on a regular basis. The Institute is partnering with both Texas Tech University and the University of Georgia to develop financial life planning programs for their undergraduate programs. Mitch is a popular keynote speaker, columnist for Financial Advisor magazine, and host of the daily radio feature, The Daily Dose, heard on over 100 radio stations nationwide.

Mitch is also the author of many groundbreaking books for advisors and consumers, including perennial bestseller StorySelling for Financial Advisors, cited by “Financial Advisor” magazine as the number one “must-read” book for financial professionals. Mitch’s other books include From the Boiler Room to the Living Room, The New Retirementality, Your Clients for Life, Your Client’s Story, The Cash in the Hat, and The Bean is not Green. For information on these books and more resources, click here.

Contact him at mitch@mitchanthony.com.

© 2011 Mitch Anthony