In previous generations, most people viewed retirement as an instantaneous shift of hard work to one of family and leisure. In more recent times, it may not be glorified. For some, it’s downright dark and scary.
Why?
Because they are witnessing many people who are living significantly longer but whose quality of life in later years is, frankly, diminished. Although people welcome increases in longevity, they fear suffering from chronic conditions that they believe are part of old age. In fact, the dramatic decline in mortality over the last century is one of the most striking features of recent U.S. and world history. Knowledge, science, and technology have propelled a steady extension of Americans’ life spans. But longer lives do not have to be viewed as negative. As noted in “Leisure in Retirement: Beyond the Bucket List,” the dark side of retirement is the exception rather than the rule. The majority of people find retirement to be a fulfilling stage in life.
Consequently, old age may be postponed but not eliminated. This requires advisors to assist in multiple stages of aging for their clients. The traditional three-stage life — educate, accumulate, retire — no longer exists. Retirement years have now expanded into three stages of their own: all-go to slow-go to a potential no-go.
The reasons that people shy away from financial planning may also be why they avoid thinking about aging. They are afraid to visualize what it might look like. They fear running out of money, physical and mental deterioration, loss of control, and having to depend on others longer. We must impress upon our clients that there is nothing to be gained by fearing aging and everything to be gained by trying to plan for it; making later life the best it can be. The pendulum must shift.
One of the most provocative books I have read of late is “The 100-Year Life: Living and Working in an Age of Longevity” by Lynda Gratton and Andrew Scott. The book takes a very analytical approach toward why people need to plan their lives early, and it convincingly argues that the traditional way of looking at life as three stages is outdated. The authors propose that we need to develop a more multistage, age-agnostic model for the later years of life.
When I have questioned my clients about what keeps them up at night, it is increasingly becoming less about running out of money and more about the quality of their lives and that of their loved ones. It is how they spend their extra time that is fast becoming their No. 1 priority.
As advisors, we know that the most pressing aspect we must discuss with clients is how to make the finances work. But the real insight comes when we focus on the intangible assets.
The advisor’s role, in addition to assisting with the financial impact of decision-making, is to:
- Talk with clients about what longevity means to them.
- Help envision what their long life might look like.
- Make a plan, understanding that there is no one singular linear route into the future.
For example, I often begin by asking questions such as, what does quality of life mean to you? Or what is your interpretation of where you are right now? That question names the situation. And of course, what are your greatest fears of the future? What are your hopes for the future?
One of my clients told me what was most important to her was to be able to continue painting, which was a passion. The changes wrought by the COVID-19 pandemic made her feel depressed and brought an end to her taking in-person classes. Together, we discovered an art teacher who was providing lessons via Zoom, and she started painting again. The requests for my client’s work from friends and family have tripled! She is fulfilling a very purposeful life and feels less isolated.
Another one of my clients has a terminal illness. We talk about his goals as time is running out, as well as his fears about what is to come. The conversations are not about sophisticated hard choices or last-minute epiphanies. Instead, they are about the process of understanding hopes and fears in everyday life.
We must make these discussions more of the norm instead of avoiding them. The power of the narrative is important. You need to cultivate an emotional connection into how they view their future. The message in The 100-Year Life: Living and Working in an Age of Longevity is that these changes need to be anticipated today rather than encountered later, because planning will yield a far better later life.
Without positive planning and purposeful action, longevity has the potential to become a curse. I don’t know about you, but I don’t want to witness that with any of my clients.
Catherine M. Seeber, CFP®, CeFT®, is passionate about blending both financial and nonfinancial needs and desires of her clients to make the most of their resources, time, talents, and energy as they transition through life. Cathy is a vice president, financial advisor with CAPTRUST.