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Retirement Planning > Retirement Investing

Is it time for retirement to retire?

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It’s time for this thing called “retirement” to start using its assets to golf, sail, travel and enjoy its grandchildren while it still can. After all, it’s over 78 years old.

How do we calculate its birthday? By the Social Security system.

Born in 1935, this system was a revolutionary innovation that addressed the need to take care of people who were beyond their feasible working years and dignify their lifestyle until they died.

But in 1935, the life expectancy was actually lower than 65, and only around 57 percent actually lived past that age. Today, life expectancy for someone who just entered the workforce is closer to 80, with about 80 percent living well past age 65. Furthermore, people are living healthier lives. Sugary drinks and trans-fats aside, medical technology is enabling people to enjoy 65 as the new 45.

So why do we still talk about 65 as some magic number? Why should somebody stop contributing at that time? Today’s workforce doesn’t think of it that way anyway.

See also: Help to family rivals retirement for many boomers

“Retirement” is for old people

In fact, according to a Maddock Douglas language study conducted in 2010, 50 percent of Millennials (Gen Y) identify retirement with being old, with a negative connotation. They prefer to look at their lives as a series of adventures that make their mark on the world and on the futures of the people they care about.

Are we going to become irrelevant if we assume people want to retire at 65? Perhaps more are going to opt to “re-fire” at any age they choose, figuring out how to create, grow and use their assets to continually contribute to the world.

What implications does the change have on retirement planning? Well first, let’s stop calling it that. Maybe something like “scenario planning” or “opportunity analysis” would be more descriptive of what today’s consumer is looking for.

The career re-fire

Will the planning horizon be long or short? My bet is that it will be shorter than it is now and will continually get shorter.

People may want to plan for something five years down the road versus 10 or 20, knowing they will have the capacity to renew, reinvent and recalibrate what they want to do after that. This squares with the Gen Y view of employment.

“Lifer” is not spoken among Millennials. Jobs and careers are a series of shorter transactions. “I give, I get, then I go.” No hard feelings.

This has all kinds of implications on investing, insurance and the nature of advice. The money prowess is one thing, but the psychological competency needed is another.

What does this mean for the way we hire, train, compensate and motivate advisors? Well it could mean reinventing (i.e., re-firing) the profession too.

Today’s training programs focus on sales abilities. Producers are trained on products, techniques and, to some degree, prospecting. The industry is attracted to those with finance and business degrees or those who just have selling in their blood and a nice network.

But are these the skills of the future? While they are certainly beneficial, they may need to change. Advisors of the future may need more ability to understand and empathize with people, to know the psychology of the consumer, and to manage change with grace and confidence. They should be more adept at understanding patterns of thinking and human behavior. Most importantly, they will know how to help people find their own inner purpose to make sure they are maximizing it. It sounds more like a life coach, psychologist … or maybe even a professional best friend.

While some producers have these skills naturally, most don’t. But what if the majority did?

Would we be insurance agents or change agents? Would we motivate around profit or purpose? Would we compensate on income or outcome?

Hmmm. Something to think about for 2014.

For more from Maria Ferrante-Schepis, see:

What LTCI can learn from life insurance

Industry reinvention: Horror story or opportunity?

Flipping the awareness paradigm


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