By now it’s no secret that men and women have different needs as they approach and plan for retirement. Also, more and more people are writing and discussing the “gender pay gap.” It poses a particular challenge for women in retirement as they grapple with the triple-bind posed by typically fewer years actively earning, earning relatively less, and having statistically longer lifespans than men.
But men also have special, distinct needs in retirement. However, these tend to be less financial than emotional. Especially with boomers and older Gen-Xers, men approaching retirement have been immersed all of their working lives in a culture that tends to define them by what they do and accomplish. The result is that far too many of them reach retirement with a self-understanding poorly suited for the very different opportunities and challenges presented by the retirement lifestyle.
But even these emotional considerations come with some financial ramifications that we, as planners, need to take into account as we help them prepare to successfully negotiate this next, very important chapter in their lives.
Focusing on relationships
According to a recent study by sociologists at the University of Wisconsin, men’s focus tends to shift as they approach retirement from an orientation toward career to a greater interest in relationships. For women of similar age, such a shift is typically much less dramatic, since women tend to be more relationally focused anyway.
But for men facing the end of their active working lives and the prospect of losing the structures imposed by the 9-to-5 work week, the pivot toward family and friends, as opposed to work colleagues, represents a much more noticeable change.
And, by the way, this shift is not confined to people in the U.S. The University of Wisconsin study included surveys conducted throughout most of the Western world, including Spain, Sweden, Estonia, and other countries. Across the board, men indicated that they were becoming more dependent on family and other social relationships, while women largely indicated that they intended to do more of what they had already been doing (which, incidentally, included spending more time with grandchildren).
The problem is men have not historically been socialized to understand the shift that takes place in retirement. After all, the modern concept of retirement as a period potentially lasting decades is rather recent.
Not so long ago, the expectation, especially for men, was that you worked until you were physically unable to do so, and the amount of time from the point of incapability to death was often less than five years. As recently as 1960, for example, the average life expectancy for an American male was 66.6 years. Now, the average American male can expect to live to be nearly 79, and it is increasingly common for people to live well into their 90s.
What this means for advisors is that we must begin guiding our male clients who are approaching retirement to think beyond the money (and the golf, fishing, or whatever other hobbies they believe is going to soak up all their newfound spare time).
While it’s great to eagerly anticipate the prospect of spending more time doing the things we enjoy, we also need to help our clients reflect on how their retirement lifestyle will contribute to their sense of meaning, fulfillment, and self-worth. What made them successful and admired in the workplace may not be what helps them derive a sense of self-worth from this new phase of life.
Giving it away
Related to this new focus on relationships and their meaning, the University of Wisconsin research also indicates that retired men, more so than women, make the decision to transfer wealth to children or other family members. While researchers noted that in married couples, this decision was typically discussed by both spouses, it was only when the male partner had retired and shifted his focus toward relationships that the rate and number of transfers increased most significantly.
In some ways, this newfound attention to giving away assets may be a leftover from males’ traditional orientation toward being the provider for the family. But it is also significant that the study indicates that the tendency toward transferring wealth was far more pronounced among men with more education and earning power.
In other words, an advisor’s HNW male clients may acquire a greater interest in estate planning and other wealth-transfer strategies as they draw nearer to their retirement years. If they are spending more time thinking about relationships and those closest and most important to them, it seems logical that they will be considering appropriate ways to make financial decisions that support these new priorities. Advisors should be aware of these tendencies and prepared to help male clients address them.
The important things
As fiduciaries, we pride ourselves — justifiably — on placing the client’s interests foremost. What we sometimes need to be reminded of is that those interests reach beyond the balance in an IRA or a 401(k) account.
Because our clients depend on us to provide guidance driven by a deep knowledge of their situation and priorities, it is incumbent upon us, as advisors, to initiate discussions that have as much to do with matters of meaning and self-understanding as they do with markets and rates of growth.
Kimberly Foss, CFP, CPWA, CFT-I candidate is president and founder of Empyrion Wealth Management and author of “Wealthy by Design: A 5-Step Plan for Financial Security.” Kimberly combines a technical expertise with a real passion for her work with her clients, including family stewards, women in transition and thriving retirees. She regularly shares her financial expertise with leading media outlets. In 2021, Kimberly was named to Investopedia 100 Top Financial Advisors and recognized with the ThinkAdvisor LUMINARIES award.