One of the primary reasons why clients reach out to financial planners is to plan for financial security in retirement. Of course, financial planners today deliver far more than helping clients to simply save money for the future. You help clients to visualise what their retirement will look like, you put a cost on this life and then develop a plan to help your clients to achieve the life that they want.
This is very valuable, but clients need more help than this.
Retirement has a huge impact on clients, who overnight go from being very busy people to well, maybe not having a lot to do… Not working any more creates a huge void in their life. Of course for some, this is a very welcome space, for others it brings a range of issues with it. When they’ve hung up their boots, it is often only then that people recognise how important their colleagues were as part of their social fabric. When this daily interaction is no longer there, loneliness can ensue. Of course on top of this is the loss of a sense of purpose every day. Before retirement, your client got out of bed every morning to go to work, to earn money and to achieve their work objectives. Now these are no longer there, what drives them every day?
As their financial planner, you can help your client prepare fully for retirement by expanding your conversations far beyond the financial aspects of their later lives. Here are some areas that you might help them consider,
Being with their partner every day
This is not a punishment! But it will definitely take adjustment for both your client and their partner. Routines will now change for each. Your client needs to develop a new routine and the immediate thought might be to hang out with their spouse every day. However their spouse may be happy with their own existing routine (that doesn’t include your client) and might not want to change it.
Of course the answer is in finding a balanced approach. It is about awareness of each other’s space, routines and hopes for the future together. The key to this is talking about it and working through it together. As their financial planner, you can gently guide this conversation.
There is time to fill
The thinking around this needs to begin long before retirement. The working day, including commuting time often punched in 11 or 12 hours every day. That’s a lot of time to fill now, so how is your client going to do it? Are they going to play lots of golf and even then, what will do with the rest of their day? Are they going to study or do voluntary work? Are they going to travel to all those places they had long promised themselves to see?
Your clients need an activity plan, as well as a financial plan. You have worked with many clients as they transition into retirement. Tell the stories of these other clients, how they transitioned, the activities they carried out, how they made retirement work for them. Hearing other people’s experiences is always a useful guide.
Encourage clients to mind their health
You have seen the cost of clients getting ill. Bring good health practices into both your client’s financial plan for retirement and also their activity plan. Will they join a golf club or a leisure club with a pool and gym? Will they go for a walk every day?
Also encourage your clients to stay sharp mentally too. Their plan should include cashflow for meeting friends, getting out and about and maybe even going back to college to study. All of these will help your clients stay fit and strong.
Remind your clients of their value
Your client has so much to offer in terms of experience, expertise and time. Some people can retire with an ensuing perceived loss of value. Previously a company and colleagues relied upon them, and now that is gone. All that actually needs to change here though is that while previously your client was paid for their time and expertise, they can still use their skills, but maybe without payment or for lower payment. Your client can now work on their own terms – maybe for someone / a charity that they want to work for, at times that suit them and in ways that make them feel good about themselves. Your client will add enormous value, whether that’s to a voluntary organisation, coaching a sports team or mentoring less experienced business owners. Many retired people build up nice little income streams for themselves in retirement, by putting their skills and expertise to work, all on their own terms.
Helping your clients to get their finances in order is very important for them to enjoy a happy and satisfying retirement. But it’s the other factors that will make them feel good about themselves and will help them to live their life to the full for many years to come. As their financial planner, you can guide your clients to think about these areas and help them achieve a full life after retirement.