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Havent Heard Of Pretirement? You Will

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More and more boomers are delaying retirement for

non-financial reasons and need advice on how to do it

San Diego

Everyone has heard of planning for retirement, but what about planning for pretirement? If Peter Lindquist has his way, growing numbers of financial planners will be helping clients to plan for “the stage of life that falls between intense work and the rocking chair.”

Speaking here at the annual conference of the Financial Planning Association, Lindquist, president of Life Puzzles, LLC, of Louisville, Colo., said the linear model of life that has reigned for the last 50 years is changing. In that scenario there were three distinct stages in a person’s life, he said. These were: 1) the education/growth stage; 2) the work/accumulation stage; and 3) the retirement/relaxation stage.

But what has been happening, he said, is that the education stage has been extending further into what would have been the working years, while at the same time, retirement has been occurring earlier for many people than it would have in the past. The upshot, he explained, is that the number of working years has been shortened.

But the retirement stage could not keep growing indefinitely, Lindquist maintained, due to a number of reasons. Some of these were financial, he said, pointing to the phaseout of defined benefit plans, the problems with Social Security, boomers’ high personal debt levels and low savings.

But in addition, he said, boomers have rejected the traditional retirement scenario of their parents for non-financial reasons and many of them intend to continue working part time.

So, what do these “preretirees” really want? According to Lindquist, they want freedom and flexibility, new opportunities, involvement, choices, and discretionary work that has meaning and purpose. A lot of this has to do, he said, with intense dissatisfaction with their careers as they’ve aged.

Many older employees are yearning for change, he said, and job satisfaction “is at an all-time low.” Older workers now have a reduced sense of loyalty to their company, according to Lindquist, for several reasons including widespread layoffs, outsourcing, pension plan defaults and “a poor perception of company leadership ethics.”

Pretirement, however, allows older workers to focus on the positive, not the negative, Lindquist said. This new stage of life has many benefits for those who take it up, he said. (See chart.)

Lindquist sees pretirement as a huge opportunity for financial advisors. Some of the typical concerns that preretirees have about retirement, he said, are knowing when to retire, coming to terms with their changing identity, making the transition into retirement, dealing with health care problems, and staying relevant and involved.

What they want from their advisors, he said, is someone who can help them “visualize the future”; is trustworthy; who understands and relates to their lifestyle needs and desires; and who does expert financial planning.

With their relatively strong levels of trust, “financial planners are uniquely positioned” to take advantage of the new opportunities that are surfacing, said Lindquist.

He pointed to two services that he said held particular promise. First, he explained, were health care coverage advisory services. Dealing with the health care system is a huge problem today, he said, and as boomers age, it will only grow greater. “Client anxiety is high because of lack of knowledge and uncertainty” about dealing with the system, he said. This does not grow any less once a person is retired and, in fact, may increase once a person’s working years are over.

Advisors who position themselves “to help clients negotiate through the maze” of health care coverages will earn strong loyalty from those clients, he said.

The second area of particular promise, according to Lindquist, is in pretirement planning, especially with issues such as goal setting and timing when to retire.