Journal of Financial Planning: June 2012
Jonathan Guyton, CFP®, is principal of Cornerstone Wealth Advisors Inc., a holistic financial planning and wealth management firm in Edina, Minnesota. He is a researcher, mentor, author, and frequent national speaker on retirement planning and asset distribution strategies, and a former winner of the Journal of Financial Planning’s Call for Papers competition.
In 1986, I retired. Well, sort of. Actually, that’s quite a stretch. However, what happened contains a moment that etched itself in my memory, and which I suspect I do not recall frequently enough. I had made the decision to leave my stable salary and launch myself into the uncertainties—economic and otherwise—of self-employment. Never mind that this decision to begin a career in financial planning would prove to be one of my life’s best; that was all in the future.
In my flashback, I am walking down a hallway to the mail-drop on the 21st floor of the First National Bank of Maryland’s downtown Baltimore headquarters. In my hand is an envelope with my letter of resignation. Reaching the slender mail slot at the elevator, I pause and realize I am alone. I push the envelope through the opening and take a deep breath, still holding it tightly. If I let go, I know there’s no turning back. The pace of my heartbeat quickens with great excitement and not a little bit of fear as I ask myself one last time if I’m really ready to take this plunge … to make this transition with all its unknowns. The slightest twitch of a smile comes to my lips. I release the envelope, pause again (still smiling), and walk back to my cubicle.
Of course, I wasn’t really retiring. Far from it. However, I still believe that moment at the mail slot brought me closer to experiencing the emotions that accompany the decision to retire than any other in my life. And I find it rather remarkable that I, who have built my career around advising clients in matters of retirement financial planning, have so little real-life experience in the matter.
I’m not suggesting that because of this I am somehow ill-equipped to advise clients in holistic retirement planning, whether they are approaching this transition or already on its other side. No, my point is simply this: every so often, it’s probably a good idea to remind myself that, for all my training, knowledge, life experience, and continuing education, I still have never retired. To put a twist on the Native American saying, those are moccasins in which I have yet to walk a mile.
Perhaps there is more it would be helpful to say about the significance of this, but I’m unsure what that might be. Better to just say it, encourage myself and all of us to remember and reflect on it from time to time, and trust that in so doing we will gain a nugget of insight and humility that benefits ourselves and our clients.
The Client Becomes the Teacher
Fortunately, this little reminder can also open a valuable window. In certain key aspects of retirement planning, our clients can be among the most important teachers we’ll ever have … if we let them. And if we do, we open a window onto perspective, understanding, and even wisdom that can go far to offset our unavoidable shortage of real-life experience in our area of expertise.
Think about it for a moment: many of us have clients with whom our relationships span enough years and have built sufficient trust that they may feel quite safe in opening this window for us onto their transition. When they do, it’s our ability to use eyes to see and ears to hear (not to mention mouths to keep shut) that will determine our learning.
For starters, it will help to remember that their experience is a transition and not an event. As I once learned in a workshop exploring this led by Susan Bradley, transitions typically commence with an ending and then move through a longer-than-desired period of “processing” that is murky, complex, and challenging (emotionally, mentally, psychologically, and spiritually) before finally emerging into the light of a new beginning.
We learn well when we pay close attention to this processing. Doing so can reveal new and deeper insights into the feelings, the anticipations, the tipping points, the fears and frustrations, and the excitements that lie at the heart of movement through this life transition. Doing so will round our edges into better planners and advisers.
Retirement Lessons
It would be presumptuous to suggest I am anywhere close to thoroughly appreciating the lessons our retiring clients can teach us. However, there are a few I’ve observed often enough to notice (and occasionally articulate) during client retirement transitions.
- When a client who wanted to retire in three to five years is still projecting retirement in three to five years after three to five years have passed, you know it’s not about matters that can be addressed with a spreadsheet. More often than not it’s about a story they’ve been telling themselves—and often one they find highly convincing—for many years. Hopefully our discovery conversations will have already brought this story to light in our advisory work.
- Clients approaching retirement may return to their “financial adolescence.” This is related to the point above. By this, I simply mean that retirement can unleash unhealthy aspects of a client’s relationship with money that developed early in life and have been only marginally present until now (“swept under the rug” by the relative stability and security of their years of employment). In other words, the “stuff” that only shows up every now and then has the potential to move to center stage. It happens too often to be surprised by it.
- Clients who “have enough” often come to understand this at a variety of levels over quite a number of years. Most of this process occurs after they have begun relying on their financial assets to help fund their lifestyle. Usually their brain’s left side “gets it” first; however, it’s often only when the right side embraces it as well and overcomes its financial demons sufficiently that meaningful legacy planning can begin.
- Clients want to know when their spending activates increased potential trade-offs that would compromise their values and goals. In short, they want and will thank us (at some point) for telling them what they need to know, even when it’s not something they want to hear (or that we want to say). Thus, giving advice on such a sensitive matter makes it incumbent upon us to develop finely tuned communication skills that encourage further conversation, and to possess a keen understanding of the ever-widening research on sustainable distribution planning—lest we unnecessarily “cry wolf.”
- The healthiest retirement transitions seem to be experienced by clients who are “retiring to” and not “retiring from.” This seems to be primarily about how closely a client’s sense of identity is tied to their work life. Sadly, the more their work defines them, the more they must work at re-discovering who they are in retirement before their life can again be meaningful in full color rather than black and white.
There is indeed much to learn in the deep and wide area called retirement planning. Fortunately, there are willing teachers almost everywhere we look. And I am thankful for them.
Guyton expands on his thoughts in this article in a podcast about the lessons he’s learned from retired clients. Listen in at www.FPAnet.org/Journal/Home/PodcastPage.