Is your client emotionally ready for retirement?

It’s typical to envision retirement as an idyllic period in life when you can do whatever you want to do, and you have plenty of time in which to do it.

But the reality for most people is that the transition from work to retirement is stressful and many retirees suffer silently for the first couple of years until they figure out what they really want and need from their post-employment years.

Advisors help people become financially ready for retirement. But they also must help people decide whether they are emotionally ready to stop working.

Robert Laura is a retirement transition planning coach and speaker. He presented Retirement Intelligence, a new framework to help clients assess their retirement preparedness, during a recent webinar for Financial Experts Network.

Retirement is changing and advisors must change the way they discuss it with their clients, Laura said. Americans have been brainwashed about retirement over the past 20-30 years, he said, with these beliefs often holding them back from realistic retirement planning:

• Retirement is a financial event and you should save enough money to avoid working for 30 years. “But I’m seeing more and more clients turning 50, 55, 60 – they still have a lot of gas in the tank but they also want to have an impact,” he said.
• You gain more than you lose in retirement. “People think they will gain time and freedom but they don’t think about what they will lose,” he said. “They believe the personal side of retirement will just fall into place – but when did anything ever just fall into place? Freedom from work can work against us. People say they want to spend retirement taking walks on the beach or writing their memoirs, but none of this happens magically. They also believe more time means less stress. You may have fewer distractions in retirement but other things can multiply.”
• Clients don’t like what they do for a living. Not true in many cases, Laura said. He added that many people enjoy what they do.
• Couples who retire like and know each other. Couples may have plans and visions for their retirement, Laura said, but they often don’t communicate them with each other or put those ideas on paper.

The Holmes and Rahe stress scale is a list of 43 stressful life events that can contribute to illness. Retirement ranks 10^th on the list, and 20 other stressful life events on that list tie in to retirement, Laura said. But many retirees don’t admit their transition post-working life is not what they hoped it would be.

“Can you really tell someone retirement is not going well? No. Because you’ve been told you have all the money you need to do whatever you want and you have all the time in the time in the world to do it. And you’re not happy? What’s wrong with you?”

Laura said that’s one of the major stigmas surrounding retirement. “People will say, ‘Retirement is great; I wish I had done this earlier.’ But when you ask what they’re really doing, they’re not doing anything.”

Reframing the discussion

Advisors must reframe the retirement decision and discussion, Laura said.

“There’s a lot of procrastination with retirement planning in general,” he said. “Because retirement planning is complex and people tend to put off doing complex things.”

Retirement, he said, is not a “do or die type decision,” Laura said.

“There is so much collective anxiety around it because it’s always been five or 10 years in the distance but now it’s here and clients think, ‘I have to get it right; I’m just not sure.’ And they start freaking out about it when it’s not this do or die type of scenario.”

Many people “are so concerned about messing up retirement,” he continued.  “They want to hear about what other people are thinking and doing about retirement.”

Laura said research shows 70% of people go into retirement thinking their lives will be better. “But only 44% of people who are already in retirement feel that their lives are better. And that’s a major disconnect because people are brainwashed into thinking retirement is going to be awesome, easy and perfect but when those expectations aren’t met, they can feel out of sorts.”

Advisors must help clients do a better job of envisioning their retirement, he said.

“I tell people, ‘You have good intentions about retirement but you’re not being intentional. What does a perfect day look and feel like? Let’s plan this out. Let’s look at everyday life and not just this generic stuff that you’re going to have enough money, you can do what you want. Then you don’t end up doing anything.”

Laura said that the way advisors frame retirement is important. “It’s not about sugarcoating it and saying, ‘Retirement is great, all my clients love it.’ We need specific strategies to foster change and outcome.”

Advisors often use “out-of-date language that makes you sound irrelevant,” Laura said. He provided some examples.

• 10,000 people retire every day. “No, they don’t,” he said. “Ten thousand people turn retirement age every day but we already know that, so why are you telling people that when everyone knows it?”

Laura suggested framing the conversation differently: “I believe 4,000-5,000 who turn retirement age every day are likely to fail or struggle with the retirement transition. It’s actually becoming popular to fail at retirement because it says you’re still relevant and connected. The reason why people think they don’t need help with retirement is because retirement is perceived as being good. If we take that away and say, ‘No, it’s not good because you lose things like structure and routines,' it changes the conversation so there’s power to opening yourself up to new ideas and new steps.

• People would rather spend time planning a two-week vacation than planning for retirement. “I would rather plan a two-week vacation than planning for more than 30 or 40 years of my life,” Laura said. “It’s hard to do. I would rather talk about the statistic that 60% of inmates who escape from prison are caught within the first 24 hours and 80% are caught within the first week. What does that have to do with retirement? The issue with prison escapes is they spend so much time planning on getting out that once they get out, they don’t have any tools or resources or plans on what to do.

“It’s the same with retirement. People are so focused on getting to that finish line, getting out of the workplace, but then they don’t know what to do when they get there.”

• You must retire to something. “You’ve been focused on your work all these years and now you’re going to magically become this new person after you retire? That’s not the case. That’s why I say you must retire with something and not to something. If you want to create a successful life in retirement you must do it before you get there and then take it with you.”
• Retirement will make you happy. Retirement is not a feeling, but an empty bucket, Laura said. “And if you don’t fill it up with stuff that’s important to you, other stuff will creep in. Retirement doesn’t eliminate work, it reorders it. A successful retirement isn’t one without problems but one in which we learn to overcome them. Resilience is key.”

To view a replay of the webinar, click here: https://www.financialexpertsnetwork.com/webinars/sessions/disrupting-retirement-planning-retirement-intelligence-or-rq

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.

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Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].