One of the biggest determinants of success post-work is the capacity to retire to something, rather than just from something
For financial advisors, understanding the impediments Canadians face on the road to retirement is relatively straightforward. Those barriers are largely financial and with the right plan, disciplined savings, diversified investing, and the avoidance of truly terrible luck, they can be overcome. It’s not an easy process, but advisors have a playbook for retirement planning and know how to get their clients there. What advisors and clients often lack a playbook for is the moment when a retiree wakes up and doesn’t know what they want to do. That ennui, a combination of boredom and existential dread, can destroy the quality of someone’s retirement. While controlling for a retiree’s ennui may be beyond the dollars and cents of financial planning, Tanya Staples believes advisors can and should show their value by addressing it in their clients’ plans.
Staples is a Professor of Financial Planning at Conestoga College, she holds a CFP® designation and is currently a PhD Candidate at Kansas State University’s in the Personal Financial Planning Program. She is also still a practicing financial planner. She explains that the problems feeding into retirees’ dissatisfaction are myriad, with some tied to finances and others tied to unrealistic expectations. She argues, though, that advisors need to work to ensure they can put themselves in retirees’ shoes.
“We’ve not experienced retirement ourselves as advisors. Experience tells us so much and the psychological role and impact of retiring, I think, is not as well known as it needs to be,” Staples says. “People have to retire to something otherwise by default they are just retiring from something, which can be very negative for many people. We have defaulted as an industry to the numbers, but supporting the client in the psychological process of leaving something that they potentially loved, or being forced to exit it and not knowing what the future holds is scary.”
In her financial planning work, Staples had her clients do an exercise to help address that psychological piece. She asked them to plan out two weeks without work that couldn’t include a vacation. Once they mapped those weeks out, she had them multiply those two weeks by 26. She then sat with those clients, looked at a year without the structure, socialization, and purpose that their work gave them, and asked if they could live with that schedule in a way that made them want to get up in the morning. She asked them if they would feel valued, if they would feel like they’re giving back, if they would feel like their skills are being challenged.
Most couples, she says, became frustrated as they could not find that sense of satisfaction in their planned retirement year. As they did so, Staples highlighted the key tension in retirement. “Between zero and five, our parents tell us what to do. Between five and twenty-five, school tells us what to do. Then between twenty-five and sixty-five our employer tells us what to do,” Staples says. “Then we wake up one morning and nobody tells us what to do, and that is really terrifying.”
Financial realities need to be factored into these existential questions. If a retiree can smooth over their dread by saying they’re going to golf every day, questions around how much that will cost and what they might do in winter need to be asked. The financial side of the plan can empower the existential side by clearly outlining what a retiree can and cannot do with their time.
As with many other industry trends, Staples notes that the US market is further ahead on these existential retirement questions than Canada is. There is a regulated financial therapy association in the United States, which offers interdisciplinary training on the psychological aspects of financial issues like retirement. Staples believes that developing those skillsets could help an advisor set themselves apart in the context of a rapidly aging Canadian population.
“It really needs to begin with what clients value and what they really appreciate. I think it's much easier for fee for service financial planners to do this work because they can just say how many hours this going to take, what we're going to discuss, and the value they bring,” Staples says. “There is a lot that we can do as financial planners we know about financial planning psychology…I think that's a real niche, to potentially uncover how to help your client retire to something that they are really going to look forward to.
“I think a great retiree is someone who comes into your office and says, ‘I have no idea how I worked, I am so busy now,’ I remember those clients, they made me feel fantastic because I knew I did something right.”
