Like most advisors, I thought I had a pretty good idea of how the general public was feeling about retirement until I read the 85+ comments spurred by this post on NPR’s Facebook fan page.
Here’s what NPR asked:
One might think the comments would be split evenly between (i) those who have saved enough for retirement and (i) those who have not. Not even close… about 90% of the commenters were disgusted at the thought of retirement.
Here are a few of the comments:
“No one in my generation is going to be able to ‘retire’ as depicted in the movies and fantasy novels published by investment corporations. So really, why bother?”
“I’m currently debating on putting a huge chunk of cash…towards either my Roth IRA or a super nice guitar. The Roth won’t do me any good till I’m 56, currently 30, but the guitar will be there every day when I get home from work till my dying day.”
“First I need to make enough to have a retirement plan…”
“My generation of Americans won’t retire, only the rich will afford it. No sense in investing what’s just going to get robbed by the stock market when they engineer another crash. I plan on working to death.”
The phrase “Houston, we have a problem.” comes to mind every time I read these remarks.
As financial planners, we know that people can be hesitant to invest in the stock market and commit to building a plan for retirement. And who can blame them? They just “survived” the worst economy since the Great Depression. And most of the general knowledge about investing comes from recent newspaper headlines and the talking heads on CNBC.
But what do we do about this? Seriously, 90% of NPR’s commenters were rejecting the idea of saving for retirement…
Do we stand by, work with the people who “get it” and ignore the rest? No chance. That’s not why I entered the business and I’m guessing many of you feel the same way.
We need to help people connect with reality. We need to humanize retirement. After quite some thought, I see there are 3 steps to this.
Step #1 – Bring the Definition of ‘Retirement’ To The Forefront and Throw It Out
Dictionary.com defines retirement as:
1) Removal or withdrawal from service, office or business
2) Withdrawal into privacy or seclusion
What?! I’m retired, so now I’m no longer of service? Withdrawn into seclusion? Great.
Both of these explanations sound awful. My interpretation of these definitions goes something like this… Retirement: The act of stepping on the conveyor belt to the morgue.
Another reality is that our society has glorified retirement. The average person can’t even imagine living the “retirement life” as it’s depicted by our industry; images of extravagant travel destinations, elegant nights on the town, and golf vacations. Sure, these are all great goals to have, but how is the average person who works constantly to stay above water supposed to picture themselves living this kind of life. Here’s where we step in.
Step #2 – Educate Our Clients About What Retirement Could Really Look Like
We need to let our clients know that it’s not an either/or proposition. When asked about retirement, a person need not say, “Well, I don’t see myself having enough money to stop working at 65, so that means I can’t retire. And, if I can’t retire, why the *%#! should I be saving at all.”
The truth is, retirement is nether a conveyor belt to the morgue, nor a 30-year-long vacation in the tropics. It’s real.
What if we could show clients how saving a little over long periods of time could cushion the blow. Maybe “vacation retirement” as we’ve all grown to know it is not feasible. So what? We have the ability to help our clients design a life that works for them based on their current financial circumstances. Whether that means that they stop working, find a part-time job or become an entrepreneur and create their own business, show them that they can dictate how it goes… They are in control of their future.
Step #3 – Construct Something Tangible for Clients to See
People want to see how we can help them, not just hear us talk about it. The good news here is we can show how saving for retirement can be done through a consistent, step-by-step process.
We all know financial planning not a guessing game or a chance happening, yet most American’s think we sit in a back room, cooking eye of newt stew and sewing voodoo dolls.
We aren’t talking about playing the lottery. We are talking about strategically building a plan so that our clients can retire with confidence and dignity.
For many years, people couldn’t put a finger on their current finances. Cash flow, net worth, etc., were not often discussed because current information was not easily available. It was overwhelming.
If someone doesn’t understand “where they stand today”, how can we expect them to build toward tomorrow? That’s like leaving on a road trip to California, but not knowing if you are departing from Florida or Alaska.
Today, we have this information at our fingertips. Through cloud software we can construct a client’s current financial circumstances in a few hours and show them exactly where they stand. Real time cash flow tools, account aggregation and even performance reporting can help paint a clear picture for clients on a daily basis.
Combine these tools with retirement projection software and you have a complete package; something real that clients can point to and experience with you, rather than simply imagine. We now have the ability to make their personal finances a reality.