PLAN­NING FOR RE­TIRE­MENT VS. PLAN­NING FOR QUAL­ITY OF LIFE

Financial Planning - - CONTENTS -

SPON­SOR CON­TENT FROM HARTFORD FUNDS

Re­tire­ment can feel like a faroff con­cept, and the del­uge of news — and con­flict­ing view­points — on the topic could cause con­fu­sion and anx­i­ety around how much we should be sav­ing. Hartford Funds’ John Diehl, Se­nior Vice Pres­i­dent of Strate­gic Mar­kets, dis­cusses the three ques­tions iden­ti­fied by the MIT Age­lab that fi­nan­cial ad­vi­sors can ask their clients to as­sess how pre­pared they are to live well in re­tire­ment.

What makes re­tire­ment feel so elu­sive?

Start­ing at a young age, we’re en­cour­aged to save for re­tire­ment, but most peo­ple don’t know what ex­actly they’re sav­ing for or how much they should be sav­ing. Re­tire­ment is com­pletely un­known un­til we’re ac­tu­ally in it, so it’s nat­u­ral to think of it in the ab­stract. Com­pound­ing the al­ready-am­bigu­ous na­ture of re­tire­ment is the me­dia cov­er­age — there are count­less news sto­ries about changes to the tra­di­tional re­tire­ment land­scape, what re­tire­ment costs, and at what age it’s ideal to re­tire. The over­abun­dance of in­for­ma­tion and the dis­tance peo­ple feel from re­tire­ment can make it seem in­tan­gi­ble.

How can an ad­vi­sor make the con­cept of re­tire­ment more tan­gi­ble for their clients?

Ad­vi­sors should help their clients cre­ate a vi­sion for their re­tire­ment. Find­ing out what they want, need, and hope for in re­tire­ment, and then de­vel­op­ing a fi­nan­cial plan around those in­ter­ests, can help clients re­al­ize why they are mak­ing the in­vest­ment in the first place. If they have a cus­tom-built vi­sion to work to­ward, clients may feel more en­gaged and mo­ti­vated to have and ex­e­cute on the re­tire­ment con­ver­sa­tion.

What do these ques­tions have to do with re­tire­ment?

Al­though these ques­tions seem un­re­lated to re­tire­ment, they are de­signed to en­able the ad­vi­sor to un­cover im­por­tant fac­tors that can help de­ter­mine their clients’’ fu­ture qual­ity of life. These ques­tions ini­ti­ate con­ver­sa­tions about the clients’’ plans for where to live, how to get around, and how to spend their time in re­tire­ment, so they can be a great start­ing point for ad­vi­sors to find out more about their clients and to en­gage them in plan­ning for a sat­is­fy­ing re­tire­ment. The ques­tions also in­ject a bit of re­al­ism into that vi­sion of re­tire­ment. The me­dia coun­sels us to think about bike rides on the beach and rounds of golf, but we find that things that bring pur­pose and mean­ing, and our abil­ity to ac­cess those things, ac­tu­ally are what qual­ity of life is all about.

When should an ad­vi­sor ask clients these ques­tions?

Ad­vi­sors should in­cor­po­rate these ques­tions into the com­pre­hen­sive re­tire­ment plan­ning con­ver­sa­tions they have with clients. Plan­ning is in­te­gral to liv­ing longer and bet­ter, and be­ing fully pre­pared for re­tire­ment means know­ing what to ex­pect from both a quan­tity and qual­ity stand­point.

”The in­dus­try has not done any fa­vors to young ad­vi­sors,” says Douglas Boneparth, who owns Bone Fide Wealth in New York.

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