It was a tense and unnerving situation every time. On one hand it was thrilling to be breaking the rules, but at the same time, I was petrified that we were all going to end up in jail. One wrong move or slip up could cost me big time, but it all felt worth it when we were finally in our seats, eating our treats at the movies. I don’t know about you, but growing up, it was a common practice to smuggle candy into the movie theatre. On the way to the show, we’d always stop at the local convenience store to buy some contraband candy. Then, we’d either give it to my mom to smuggle in with her purse or hide it in our jackets until we got past the ticket counter.
What’s interesting is the process was so engrained in me as a child that I followed suit when I had young children myself. In fact, I didn’t even give it a second thought. It was an established habit.
I don’t know if you or your clients are movie-treat smugglers, but something similar can happen to people as they make the transition into retirement. Knowingly or not, clients bring a variety of habits and feelings with them into this next phase of life, some of which can sabotage their best laid plans for an ideal life in retirement. It’s important for financial professionals to not only listen for clues that can sidetrack clients, but also have proactive discussions about what they can do to make a better transition.
What We’ll Cover
- Clients tend to go off script
- Retirement doesn’t change clients
- Retire with something
First, Clients Tend to Go Off Script
As many of you know, the concept of retirement conjures up a variety of positive thought and feelings. With more time, increased freedom, and less stress, clients assume they’ll undergo a complete transformation.
It’s the perfect movie script where they hit the gym every day, eat healthy, learn a second language, pick up an instrument, write a book, start a business, travel the world, and spend more time with family and friends.
But there’s only one problem. It’s not what happens in real life. People often struggle with the transition because they haven’t actually planned for everyday life. They only have these vague ideas and assumptions about what life is going to look during retirement. When they get there, if those images don’t come to life, they can end up feeling isolated, out-of-sorts, and disappointed with their decision to retire.
Second, Retirement Doesn’t Change Clients
Fact is, retirement is considered one of the top 10 most stressful life events, because there’s a lot to consider when someone’s making a major change after doing the same thing for 30 or 40 years. Clients need to be aware that retirement won’t change them. It just clears their schedule … that’s it.
To give you some context, think of retirement like an extended New Year’s Resolution. The start of a new year doesn’t change people. They have a plan to lose weight, save money, or make a major personal change. But most people fail when only armed with a plan. They need new routines, mindsets, and habits. The same is true with a retirement transition. Many with just a financial plan have a tough transition.
Financial professionals who want to stand out from the pack can accomplish this by making simple changes to the planning process they already use with clients. Just as you create a written financial plan for them, they also need some documentation that helps them look at the non-financial aspects of life after work. One of the easiest ways to achieve this is to ask clients to write down what a perfect day and week will look like in retirement.
This not only helps them get a sense of what a regular morning, afternoon, and evening may include, but it will also open their eyes as to the vast amount of time they’ll have to fill without their work life. It’s been my experience that people usually get to Tuesday or Wednesday in this exercise and realize golf, grandkids, and volunteering one day a week isn’t going to be enough.
Third, Retire With Something
In addition to concrete written exercises like that, advisors can improve retirement outcomes by avoiding old and outdated advice. Financial professionals need to stop telling clients they should “Retire to something,” and instead, help them find ways to “Retire with something.”
The problem with the “Retire to” philosophy is that it encourages clients to put off or postpone becoming the new version of themselves that they envisioned. Furthermore, it assumes they’ll have the time, energy, desire, tools, and support to make it happen. All of which can cause unnecessary stress during the transition, and can be mitigated by re-focusing their efforts on pursuing new things right now rather than later.
We’re all creatures of habit. As Stephen Covey famously wrote, “First we make our habits, and then our habits make us.” Therefore, we should encourage clients to put a diet and exercise routine in place, schedule social engagements, or start working at the animal shelter now. Whatever the case may be, help them take specific steps in developing their new retirement identity, routine, and mindset, because the best way to thrive in retirement is to lay the foundation beforehand.
“Wait, I’m not a therapist”
As the financial services industry continues to evolve, the human elements of our profession are becoming more and more important. Therefore, making deeper connections with clients and helping them sort out more personal aspects of retirement is something that more advisors may be faced with. The great thing is, you don’t have to ask clients to lay down on a couch and share childhood memories or complete a personality test. It’s quite the opposite. Often times, it’s just a matter of listening, being empathetic, and sharing your own experiences or that of other clients who have faced with something similar.
Remember 3 Things When Helping Clients Transition to Retirement
First, clients have vague notions of what retirement will be like. When they retire, many clients are surprised that retirement isn’t what they envisioned. Second, clients don’t automatically change when they retire. You can help them realize this. Third, help clients “retire with something” rather than “retiring to something.”
Make Great Retirement Movies
The new era of retirement planning requires financial professionals to take a much more personal and intuitive approach to planning. It’s the new narrative where trusted financial professionals make sure their clients don’t just run out of money but also family, friends, good health, and time. That means helping them put new actions and behaviors in place before they step into the leading role of their retirement.
- Share a client version of this web page with clients by email, by posting a link of the client version to social media*
- Encourage clients to write down and explore what a perfect day and week would look like in retirement. Here’s a worksheet to help you get started
- Talk to them about retiring “with” something. Use examples of other clients who’ve successfully transitioned to retirement
*Prior to posting articles on social media, please consult with your firm’s legal and compliance teams, social media policy, and required participation in social media programs.
1How Many Colleges and Universities Do We Really Need? The Washington Post, 7/20/15. Most recent data available.
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