Are Your Clients Mentally Ready to Retire?

Even if clients have the right financial mindset, less talked about attitudes could sabotage their retirement.

By Dave Buck
Dave Buck
Dave Buck

Rachel is only a few weeks away from ending her career.

“I am torn between the love of what I do as a project manager, along with my desire to retire. So, I am trying to figure out what my life will be like,” she says.

Rachel is striving to understand how to be mentally equipped for post-career living — a challenge that millions of people struggle with each year.

Financial professionals can spend decades helping their clients obtain the financial security that’s necessary to retire. The clients develop a healthy financial mindset. What tends to catch individuals off guard is the conflict between their occupational feelings and personal desires. As with Rachel, they have the material resources to stop working, but not the intangible aspects to make the most of those assets.

Both sides of the lifestyle coin

Career and retirement are two major life stages that can have a profound impact on our mindsets. In our careers, we are often driven by a sense of purpose and achievement. We may feel like we are making a difference in the world, or that we are contributing to something larger than ourselves. When we retire, we may lose that sense of purpose and meaning. We may also have to adjust to a new lifestyle that is less structured and less demanding.

Career and retirement mindsets are two sides of the same lifestyle coin. Clients heading into retirement must reconcile their feelings on the loss of meaning and intention brought by a career. At the same time, they must come to terms with what retirement life can look like.

Wealth managers can help clients align all three post-career mindsets (financial, career, retirement) as they navigate through a potentially stressful transition to a non-professional life.

The triple threat

Reports generated by the tool I use with my clients, the Retirement Time Analysis (RTA), have given me a clearer picture of just how concerned soon-to-be-retirees are about these three legs of the stool. Here is a closer look, along with some ways that you can help your clients.

The Career Mindset

Careers plays a major role in how people feel about themselves.  More than three-quarters (78%) of RTA participants believe that their job provides them with a significant amount of personal satisfaction. More than half state their career provides them with the main fulfillment in their life. It is not surprising to then see that only 36% are ready to leave their occupation. People entrenched in the career mindset often think that without a job they’ll have limited personal value.

You can help your clients by asking these questions:

  • What is your career end-date? By making them commit to a timeline, you can help them start to think earlier about their post-career life.
  • Do you want to continue working? People do not have to stop working. However, if there is a spouse or partner in the picture, both need to agree on what work looks like.
  • If you left or could leave your job today, what would you do? Shifting their eye toward the retirement mindset may jumpstart broader thinking and reflection about the personal side of life.
The Retirement Mindset

Ideally, individuals in the retirement mindset should embrace their post-career life because of all the flexibility it can bring. However, half of the RTA respondents don’t anticipate what retirement life can be like before they retire. Among those who do, just over 67% think they will be content in their post-career years, while a mere 40% believe they will enjoy life.

Help clients unpack any apprehensions that you might sense by asking these questions:

  • How do you really feel about retiring and retirement life? Many people say they want to retire because they do not want to appear ungrateful when there are really more true feelings right below the surface.
  • What brings you value outside of work? Helping clients acknowledge they contribute in many ways beyond a career creates an opening for a lifestyle strategy.
  • Imagine life without a career; what would you do? Sounds familiar right? (See the career mindset section above.) Planning goals and aspirations outside of a job helps in both the career and retirement mindsets.
The Financial Mindset

I work with clients who have amazing financial advisors. But even when their financial picture is solid, people may not truly believe the reality of their situation. Only 55% of Retirement Time Analysis contributors feel they are financially ready for retirement. Less than half have developed and use a budget. Further, just 46% have planned for major-life-event challenges.

Therefore, even if your client has a secure financial portfolio that reflects your hard work, investigate a little bit further. Ask them the following:

  • Have you created a formal budget that aligns with your financial plan?
  • What happens if one or both of you suffer major health issues?
  • What is your long-term residence plan?

It’s not too early

The average age of RTA participants is 57. While that is still years from traditional retirement age, it is the perfect time to start asking clients the mindset questions. Ideally, your clients should invest the time to create a retirement regime prior to heading into post-career life. That’s better than being like Rachel — a person who may negate the benefits of having the right financial mindset because she has yet to figure out how to deposit the lifestyle coin.

Dave Buck is the owner of Kairos Management Solution LLC and founder of the Infinity Lifestyle Design program. As a Certified Retirement Planning Coach (CRPC), he helps business professionals and their spouse or partner craft a lifestyle strategy of purpose, fulfillment and joy. Dave also works with financial planners helping their clients understand post-career life. To learn more contact him at dave@kmstime.com or visit https://infinitylifestyledesign.com/.

 

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