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Retirement Planning: Psychological Issues Faced Upon Transition

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Cruise, motor home, travel, play golf, tennis, scuba? ... Family goals. Travel goals. Financial. Volunteer. Learning. Reading. Strategies ... – PowerPoint PPT presentation

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Title: Retirement Planning: Psychological Issues Faced Upon Transition


1
Thinking.
Adapting.
Advising.
For your life and legacy.
2
AICPA PFP Section Retirement Planning
Psychological Issues Faced Upon Transition Tom
Walsh, PhDGrenell Consulting Group Ted
Sarenski, CPA/PFS, CFP DBB Financial
ServicesSeptember 2007
3
The Softer Side of Retirement Planning
4
  • We work hard to make sure our clients are
    financially secure, but are they emotionally
    secure?
  • What are their fears for the upcoming years?
  • Have they planned for their retirement years as
    well as they have planned for their working
    years?

5
Helping our clients embark on a new career
Retirement
6
Goals for Today
  • Discuss Retirement Planning as part of Financial
    Planning
  • Discuss hard/soft aspects of Retirement Planning
  • Your role as financial planner Are you a
    product seller or are your products part of an
    integrated life-process for your clients?

7
A Little Background
  • More than 70 million baby boomers will begin to
    retire soon
  • Retirement can last 30 years or more
  • Phases of retirement
  • Active
  • Less Active
  • Most people know what they are retiring from, but
    not what they are retiring to--only a small
    percentage have a life plan for retirement

8
Life Planning for Retirement
  • People are stuck in old model of retire, get
    sick and die. Few plan for the healthy, active
    stage of retirement.
  • What am I going to retire to?
  • The soft side of retirement planning is to engage
    the client in a thoughtful process of what they
    want to do, be, and accomplish in the next phase
    of their lives. We want to assist them in
    thinking through a plan deeply until it
    represents them completely. And we want the plan
    updated yearly.

9
Balanced Portfolio in Retirement Planning
  • Travel
  • Family-kids, grandkids
  • Residence, one, two? Near kids?
  • Work
  • Hobbies, recreation
  • Volunteer
  • Learning
  • Health and fitness
  • And? What is important to the client

10
One Page Retirement Planning
  • What?
  • Why?
  • Can it be bolted on to hard financial planning?

11
One Page Retirement Planning
  • Vision-What kind of retirement do you want over
    the next three years
  • Mission-What is the purpose of your retirement
  • Objectives-What are the specific results you
    would like to achieve/measure over the next three
    years
  • Strategies-How will you go about meeting these
    objectives
  • Action Plans-What is the specific plan to meet
    the objectives

12
Vision Redo every 3 years
What are you retiring to?
  • Use the balanced portfolio questions plus
  • Review your life. What is left undone? What
    have you always wanted to do but not done?
    Cruise, motor home, travel, play golf, tennis,
    scuba?
  • Think it through carefully with the client(s)

13
Mission
  • What is the purpose of your retirement at this
    phase?

14
Objectives
  • What are the specific goals that you have for
    this next year of retirement? Be specific-how
    could you measure?
  • Family goals
  • Travel goals
  • Financial
  • Volunteer
  • Learning
  • Reading

15
Strategies
  • How will you meet your objectives? What kind of
    plan(s) will take you toward your objectives?

16
Action Plans
  • What are the specific plans to achieve the goals?
    Be specific here.

17
Vision
  • During the first 3 years of my retirement I plan
    to detoxify from my work, engage in new
    activities, deepen my relationship with my wife
    and my children and improve my health and
    activity level. Thoughts for the next 3
    years-volunteer, grandchildren.

18
Mission
  • Let go of work, embrace health, family and
    activity

19
Objectives
  • Take 3 two week trips with my wife, Barbaraone
    within one month of retirement and the other two
    within the year
  • Plan and take a two week trip with kids invited
    for all or part of the timewithin 9 months of
    retirement
  • Take 8 golf lessons within the year and lower my
    handicap from 22-17
  • Reduce my weight from 185 pounds to 165 by year
    end
  • Read two books per month, one fiction and one non
    fiction

20
Strategies
  • Barbara and I will engage in a planning process
    for our trips and map out each one, including
    options for the trips with kids
  • I will join Radisson golf course, take lessons
    and join at least one league. Barbara and I will
    join a couples league
  • I will join a gym that caters to retirees and
    consult with a trainer and map out a
    health/fitness plan
  • I will spend time at the library scouting out
    books that interest me

21
Action Plans
  • We will have at least one trip agreed upon and
    planned (1.31.08)
  • We will have informed the kids of our plan for
    two week family tripwe will pay for everyonea
    family task force will plan the trip to be
    completed by 9.1.08
  • I will investigate golf course and leagues by
    3.15.08 and sign up for golf lessons and
    activities by 5.15.08
  • I will have joined a gym, consulted trainer and
    begun my fitness program by 1.15.08
  • I will have read my first two books by 1.31.08

22
Ways People Approach Retirement
  • Continuers-Continue using existing
    skills/interest
  • Adventurers-Start entirely new adventures
  • Searchers-Explore new options - trial error
  • Easy Gliders-Let each day unfold
  • Involved Spectators-Care deeply about world but
    engage in less active ways
  • Retreaters-engage less in life
  • Dr. Nancy Schlossberg

23
A Couple of Scenarios
24
Scenario One
  • Jack is a small business owner who started his
    own company at age 24 with a few dollars and now
    has a net worth of over 4.5 million dollars
    consisting of liquid investments of 2 million,
    buildings and land of ¾ million, the business
    value of 1 million, ½ million cash value life
    insurance and personal effects and toys of 1/3
    million. He is 64 years of age this year and has
    his two sons working in key roles at the
    business they are age 40 and 37. Jack owns 100
    of the stock in the business, 100 of the real
    estate the business is located in and feels that
    most of the time he cant allow the boys to
    operate the business alone because they just
    dont operate it the way he has all these years.
    He is single with no significant other.

25
Scenario Two
  • Sarah is a physician in an eight physician
    internist practice that does not have any buy-out
    provisions other than each partners share of the
    accounts receivable. She is 62 years of age and
    wishes to continue working part time until age 66
    when she is eligible for her full Social Security
    benefit. Sarah has accumulated 3 million dollars
    in the practices pension and profit sharing
    account, has a home worth ½ million with no
    mortgage, personal effects and no after tax
    liquid investments to speak of. She is an avid
    tennis player and hiker in the Adirondack
    Mountains. Her husband Bob retired this past
    year and receives a small pension from his former
    employment. They have 3 adult children Bob Jr.
    who is married to Jan and they have one child
    Jennifer, Jill and Meghan who are single.

26
Tom Walsh, PhD Grenell Consulting
Group 315.451.9293 tcwalshphd_at_grenell.com www.gren
ell.com
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