The definition of retirement has certainly changed over my 20+ year career. For the Greatest Generation and the Early Boomers, it was about completely stopping work, spending time with family, maybe some travel but mostly about not working anymore. They tended to work for the same company for the majority of their career and when they hit 65, it was time to retire with their pension, savings and social security. They called it “The Good Life”.
For the current crop of recently “retired” or soon to be retired, it is a different environment and conversation altogether. For most boomers, it’s more a of transition to something different and new. It’s about making a difference in a new way or going down a different career path or volunteering/giving back. Mitch Anthony’s book “The New Retirementality” captures this switch that has been going on for years but most advisors are now beginning to grasp.
I was lucky to read that book when it first came out over 12 years ago. Since then, our conversations with clients are more nuanced and not just focused on the end of work. Sometimes the word “retirement” doesn’t even come up in the conversation at all. Clients are more looking forward to moving on to the next chapter and that can mean a lot of different things. Even with these different conversations, many are scared about what’s next despite having a sound financial picture.
Here are some of the ideas and tools we use that we use to help clients determine whether they are emotionally ready to take the next step (note: this assumes that they can financially afford to change).
- Do They Still Love What They Do? – It’s a simple question but it goes a long way in determining mindset. We ask this question at all client strategy meetings. If the answer is yes, then why make a change assuming no health issues? If that is what defines your best possible life than keep doing what you are doing. Sometimes clients put restrictions on the things they love to do and our job as advisors is to give them confidence, through financial planning, to remove those restrictions.
- The Magic of 21 – I’m not thinking about the blackjack table. What I’m talking about are the blocks of time in a week that an individual/family will have to fill once they stop working fulltime. Advisors spend a lot of time discussing with clients all the traveling and adventures they will go on. What they don’t do, however, is determine how they regular days are going to be spent. We will help clients determine how to fill those time boxes but if they cannot complete more than ¾ of the them, then they might not be ready to stop working or to transition to the next phase. At a minimum, a follow conversation should be had.
- Staycation Anyone? – For clients within a year or two of a major transition where work will be either decreased or eliminated completely, we recommend that they take an extended vacation. Instead of traveling places, we have them live the Magic of 21 lifestyle. This can give an indication on whether a particular individual is ready for a different way of life. I think this is good for everyone but especially for my hard charging clients because the shift tends to be the most dramatic for them.
This is just a few of the tools and techniques to help our clients on the non-financial piece of their life’s transition.