You’ve heard me talk about this before: retirement is not a one-and-done decision. How clients envision their retirement is as unique as they are: there is no “one size fits all” formula. However, there is one consideration many of your clients share: they want to balance saving for the future with enjoying the present. Your clients are probably investing now with the intention of being able to enjoy it later, but those same clients may be able to enjoy both—with your guidance. As a financial life planner, you can help clients achieve the right balance “now” and “later” using L.E.A.N., a process I explore in The New Retirementality:
Looking Ahead
I recommend having this conversation anywhere from 10 to 30 or more years before your client plans to retire, so you both know where things stand. Several years ago I was speaking to a group when Nathan, the financial advisor hosting the event, approached me and shared his own story about looking ahead. Even though he was in his thirties at the time, he and his wife had an epiphany: many of the people they knew were either not able to enjoy themselves because they were worried about spending money now and risking their financial futures, or they were overextending themselves to afford an excessive lifestyle. It was one extreme or the other. There was no balance between enjoying life in the moment and saving for retirement. Most everyone they knew in their age group was letting either fear (never saving enough) or greed (spending beyond their means) dictate how they lived their lives. They did not want the pursuit of money to interfere with their pursuit of happiness. Instead, they wanted balance.
Nathan and his wife chose to set priorities and goals that enabled them to balance enjoying the now, while saving for the later. They chose savings goals that were a stretch to begin with but would become less demanding as their incomes rose. They chose to purchase a home and car that were practical, not pretentious. This enabled them to still travel––something they both enjoyed––while also meeting their goals for saving for the future. Unlike their friends and peers who were all working harder to pay off debts or having to cut back on other priorities, this couple could afford to do the opposite.
Financial life planners owe it to their clients to help them not only plan for the future, but also live life to the fullest during the present. Make the conversation about balance, not just about retirement. Here’s a simple exercise you can have your clients complete to help get the conversation started. Because life isn’t static, it’s a good idea to revisit this exercise periodically:
Retirementality Philosophical Exam
Rate your retirement concepts from 1 to 5, with 5 being the best fit for you.
I consider my work a mission in life. 1 2 3 4 5
I’m deeply energized by the work I do. 1 2 3 4 5
Being 60+ will not diminish my ability to deliver. 1 2 3 4 5
I’m in control of my career choices. 1 2 3 4 5
I have the say on how long I can work. 1 2 3 4 5
I get bored without challenges in front of me. 1 2 3 4 5
I’m not waiting until late in life to do “bucket list” items. 1 2 3 4 5
TOTAL
28–35 You’re a candidate for driving on. Don’t plan on retiring. Save your money to ensure your autonomy and freedom to do what you want.
21–27 You’re a candidate for switching lanes. Think about finding another track at some point in your life that allows you the freedom to do what you want at the pace you choose.
7–21 You might be a good candidate for taking the exit ramp when you’re financially able.
Embarking on the Retirement Journey
This conversation is all about what happens at the beginning of the retirement journey—it is often eye-opening for clients. If your clients haven’t already done this, they need to think about the correlation between time and money. Be sure they’ve completed a retirement income projection and cash-flow analysis to determine if they can afford the lifestyle they envision. I’m surprised by how many people don’t do this type of planning and quickly learn that they’re spending more than they have, putting themselves at risk.
If your client’s income won’t support their plans, there’s no magic pill: they need a new plan that involves spending less or working more (or some combination thereof). In addition to revisiting the numbers, there are a couple of exercises your clients can complete to help them gain some perspective (worksheets are available in The New Retirementality for each of the following):
1. How will your clients spend the 168 hours a week each of us has, when 40 to 50 of those hours are suddenly freed up because they are no longer employed? Have them list how those hours will be spent. They may be surprised at what they discover.
2. Have clients reflect on the value and benefits of the work they do from a lifestyle and economic perspective. Again, their answers may surprise them and help them realize working longer may not be such a bad thing.
After the Honeymoon Period of Retirement Wears Off
A 2023 article reports on the results of a study of 200 recent retirees. The results weren’t all that surprising: people who approached retirement as a “new start” or “continuation” were satisfied, while those who viewed it as “imposed disruption” or “transition to old age” were not satisfied. The takeaway is that, if clients aren’t prepared for what’s ahead, they risk being disappointed and disillusioned. Your clients need a plan that helps them remain active, engaged, and fulfilled after the honeymoon period ends. According to the 2024 MassMutual Retirement Happiness Survey, retirees that were more active and engaged were the happiest. The same study reports that more than half of those surveyed (56 percent) felt happier than at any other time in their lives. While that’s more than half, that number leaves a lot of room for improvement.
After the honeymoon period of retirement is gone, many people experience a few reality checks, and ask themselves one or more of the following questions:
Am I experiencing loss of esteem issues since retiring?
Am I sleeping later?
Am I watching more television?
Am I getting less satisfaction from my hobbies?
Have I been less social?
Do I feel aimless at times?
Am I drinking more?
Do I feel less healthy than I did before retiring?
Have I been experiencing feelings of depression?
Am I being less communicative?
Am I sensing more tension in my marriage?
As an example, the MassMutual survey cited above reported that 83 percent of retirees listed “watching television” as their top activity! Having discussions with your clients, especially those on the cusp of retiring from their “day jobs” is critical. If someone finds themselves answering “yes” to three or more of these questions after the “honeymoon” phase of retirement, then it’s time for the next conversation.
Negotiating Balances
When the initial high of retirement wears off and the reality of filling one’s time with both enjoyable and meaningful engagements hits home, your clients may need to examine the balance between vacation and vocation. When people are focused too much in either direction, balance suffers. And when balance suffers, people will feel depressed, disjointed, and just plain tired.
A few years ago, I heard someone talk about a retirement plan that divided their time evenly into quarters: play, volunteer work, family and friends, and self-improvement. Seems logical. However, within six months this person found that volunteering was hijacking everything else, creating a new form of imbalance and dissatisfaction. This person learned to start saying no because it became clear that this part of his life was out of balance. I have heard from retirees who assumed they would be spending lots of time with family, only to find family members weren’t always willing, which led to the retirees feeling like they were imposing and intruding. Others found that once they left work, their social network crumbled, leaving them demoralized.
As with everything in life, balance is a key ingredient in living a healthy, fulfilled life regardless of someone’s age, and regardless of whether or not someone is retired. Financial life planners are in a unique position to help their clients achieve that balance. And what a gift that balance is!
