I am not a psychologist, but I think retirement is a good thing for a lot of people. I also think staying in the workforce longer is a good thing for a lot of people.
The advice that some financial advisors are not giving, and people are not getting, is that retirement is so much more than spreadsheets and numbers; it’s about finding purpose, meaning, and community after you are done working so you can live a happy life.
The Connection Between Psychology and Wellness
There are a lot of positive things about work. I know it sounds funny coming from a guy in his thirties, but I’m speaking about relationships, engagements, advancement and meaning, and all of which are found in large quantities at work no matter what you do for a living.
There is a dynamic of retirement happiness. I have seen this before from some of my clients. I worry about them – not financially – but because some clients struggle with their retirements in staying engaged, in finding community, and in not being idle.
Studies show people in retirement are, on average, happier than the general population. So, while staying in the workforce is great, there is a lot of truth about people really enjoying not working. And there are studies that show some people are severely depressed and isolated from not working. Then, there is a group that benefits from staying in the workforce in order to find those aspects of wellness and happiness ahead of them.
I think there is a high level of risk at both ends of the spectrum. What we need to do as advisors is to advocate for people preparing for the psychological side of retirement just as much as they prepare for the financial side. You spend forty or fifty years socking away a little money every month and then, all of a sudden, your whole support network is gone.
Prepare For the Life You Have Always Wanted
I think it’s important for people either approaching retirement or in retirement to prepare to be service-oriented or charitable, looking for communities outside of work and giving at least some thought to the mental preparation, just as they give to the financial game, only relating to retirement. There is a lot more work to be done in our industry, and as financial advisors, and more we could be doing for our clients by having those conversations.
Our industry is narrowly focused on the money side of things because we have to be. But a big part of what we do at Hefren-Tillotson is through our MASTERPLAN®, where we lead with financial planning. If done right, it is discussing goals and life priorities. So, rather than worrying about performance and accumulating as much money as you possibly can, the idea isn’t to help clients build a huge pile of wealth they can hoard, it is to help them live their best life possible and help them achieve their goals.
As I have matured as an advisor, I have also come to understand how I like to spend my time. Basically, I want to help people have better retirements by advising them to spend some of their savings. I can’t take credit for this phrase, but rather than worrying about return on investment (ROI), advisors would be better off talking to clients about return on life (ROL).
It is life priorities, retirement priorities, helping them address their core values, what it is they want to do in retirement, what they want to achieve and what their goals are.
Family Plays an Important Role
I would say that a large percentage comes down to family and time. No matter how wealthy we are, we can’t buy time. I have clients that are really passionate about charities and causes they want to spend more time with. Ultimately, if they don’t have children or family they can leave assets to as a legacy, it’s how they can best position to achieve that goal for these other causes that are really meaningful to them.
I remember encouraging one particular retired client to find work by connecting him to a couple of different people he could talk to. Basically, he was struggling with aspects of his life like his spirituality, community and purpose. It’s challenging for me because at the end of the day I am an advisor and not a psychologist or a counselor. But by the nature of our work, it is a lot of what we do. Being able to recognize clients’ struggles and then encourage them to seek help from people we know is a lot more important than if they earned 8- or -10 percent on their investments this year.
There are advisors only doing what I call, “half” of their job when they are only focused on money. With us, if we sent people off into retirement on their last day of work, and they leave our office with a giant binder full of charts and numbers, that’s neither going to help them replace their work identity nor help them feel connected or relevant. What you are going to do when you retire, where you are going to live, and how you are going to spend your time are important considerations. That’s the advice that’s missing. That’s the advice we must give to our clients and do for our clients.
For me, personally, I would like this advice. I would hope that someone who has been there pulls me aside and gives me this advice. I know the numbers side of things and have dealt with plenty of clients on their way to retirement. My own parents have been great. My dad is in his seventies and works one or two days a week. I don’t think he’ll ever stop.
Someone I recently met in their late fifties said they would “never” fully retire and will “always” do something. The numbers will take care of themselves, of course, with some guidance, but we must talk about purpose, meaning and what retirement looks like for you.
If you want someone to talk to who understands there is more to retirement than just the numbers, and someone who will focus on your goals and priorities, your family and theirs, and whatever else is important to you, please reach out to me. I love having those conversations, and I would be happy to help you.