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What Financial Planners Don't Get About Retirement

Money advisers — and everyone over 50 — need to wise up to the new rules

By George H. Schofield, Ph.D.

Two financial professionals sat across from me at a recent breakfast meeting. After some polite chitchat, I said: “Let’s cut to the chase. Why are we here?”

The younger one was taken aback by my directness. The older one was unfazed. “We want to do a free financial assessment to assist you with your retirement financial planning,” she said.

"What makes you assume I need to do financial planning for retirement?” I asked.

(MORE: Why Won’t We Use Financial Advisers?)

She raised her eyebrows. “Because of how old you are and that’s what we all dream about,” she said. “Retirement. No work. Lots of leisure time. And it will take money to be able to afford it. That requires retirement financial planning.”

An Outdated View of Retirement

Clearly, they hadn't done their homework on this potential client.

Yes, I'm 65. But I'm happily self-employed and make no secret of my intention to work for the next 30 years. Plenty of people in my age group, plus or minus 15 years, don't plan to ever stop working either — and are thrilled about it.

These planners didn’t seem to understand that, for many people like me, the notion of a traditional retirement (when you stop working altogether and live off a pension or savings) is history. Here’s why:

(MORE: How to Find a Financial Adviser Who’s Right For You)

Many of us either don’t want to stop working or can’t afford to do so. Some 40 percent of boomers say they plan to work until they die, according to AARP. The Employee Benefit Retirement Institute says nearly half of Americans (46 percent) have less than $10,000 saved for retirement.

Even those who’ve saved a lot for retirement may find that "a lot" won’t be enough. A recent New York Times article on whether $1 million is enough to retire noted that a couple retiring this year at age 65 with $1 million invested in municipal bonds face a 72 percent probability that they’ll exhaust that money before they die, assuming they withdraw 4 percent a year, adjusted for inflation — the standard rule of thumb used by many advisers.

Interest rates for savers are too low. Traditional, "safe" investments, like bank CDs and bonds, aren't offering meaningful yields these days, even though rates have been climbing a bit lately.

We're living longer, so our money needs to last for more years than in the past. The average 65-year-old woman will live to 86; for men, it’s 84. One out of 10 people who are 65 today will live to be 95.

So here’s what I ultimately said to the two financial advisers: "You’ve come to sell me something I don’t want. Why not sell me something I do want?

What I want, I explained, is financial planning as one component of an integrated, ambitious, adaptable life plan that will take me from my mid-60s into my early 90s.

They were skeptical, but intrigued. A little baffled, too. I don't think they'd ever heard this from anyone before.

So I spelled out to them my five rules of advice for people in their 50s and 60s who are trying to sort out the next phase of their lives. Maybe this guidance will be helpful to you:


1. Take a long, hard look at your life as it is right now. Where are you in terms of the energy, creativity, relationships and interests that can carry you to your 90th birthday?

2. And take a long, hard look at your health, too. Are you taking steps to sustain your physical and cognitive well-being? By that I mean are you exercising enough, maintaining a healthy diet and adhering to the proper doses of your medications?

Sound out health care professionals — your physician, at the very least — when making your assessment.

3. Be honest about your finances. Do you have enough assets and liquidity or will you need additional income streams to carry you through your coming years?

Ask yourself whether you can reduce your spending and still maintain the quality of life you want.

Hire a wise money adviser who does get the "new retirement" when you evaluate your financial situation. The faster you can put a well-thought-out financial plan in motion to match your goals and dreams, the better.

4. Decide who you want to be in the future. Figure out what it will take to transition from the “current you” to the “next you.” You can get started by reading my earlier Next Avenue article, "The 5 Abilities You Need to Master After 50," which discusses, among other things, the importance of finding meaning in life and being comfortable making informed choices as circumstances change.

Keep all of your best attitudes and behaviors; jettison the rest.

5. Take more active responsibility for your life. For years, many of us did things and made decisions based on our kids, work and spouse or partner. But now that our children are out of the house (generally), work is winding down and there's a decent possibility that we’ll become single one day, we may now need to become the most important people in our lives.

What the Financial Advisers Learned

As for the breakfast meeting, we ended on a high note.

No, the advisers didn't get my business. But they left with a great new idea for their business: Throw out stale assumptions about retirement and recognize that financial planning should support a life plan, not the other way around.

George H. Schofield, Ph.D., is a business consultant, speaker and professor, specializing in organizational psychology and career development. He is a former vice president for the Bank of America, a board member of several nonprofits and author of After 50 It’s Up to Us: Developing the Skills and Agility We’ll Need. Read More
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