Title: Retirement Planning: Psychological Issues Faced Upon Transition
1Thinking.
Adapting.
Advising.
For your life and legacy.
2AICPA PFP Section Retirement Planning
Psychological Issues Faced Upon Transition Tom
Walsh, PhDGrenell Consulting Group Ted
Sarenski, CPA/PFS, CFP DBB Financial
ServicesSeptember 2007
3The 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?
5Helping our clients embark on a new career
Retirement
6Goals 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?
7A 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
8Life 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.
9Balanced 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
10One Page Retirement Planning
- What?
- Why?
- Can it be bolted on to hard financial planning?
11One 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
12Vision 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)
-
13Mission
- What is the purpose of your retirement at this
phase?
14Objectives
- 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
15Strategies
- How will you meet your objectives? What kind of
plan(s) will take you toward your objectives?
16Action Plans
- What are the specific plans to achieve the goals?
Be specific here.
17Vision
- 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.
18Mission
- Let go of work, embrace health, family and
activity
19Objectives
- 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
20Strategies
- 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
21Action 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
22Ways 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
23A Couple of Scenarios
24Scenario 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.
25Scenario 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.
26Tom Walsh, PhD Grenell Consulting
Group 315.451.9293 tcwalshphd_at_grenell.com www.gren
ell.com