Human longevity is improving, so why isn’t the concept of retirement following suit? The world continues to operate as if age 65 is the ideal time to retire, while the time post-65 continues to stretch longer and longer. This means that retirement income also needs to stretch for much longer, and people are already struggling to prepare for that. While one solution is simply to accumulate more money, that’s typically not how things work. An even better solution is to stop retirement altogether.
Yes, it’s a bold statement. However, we believe that empowering clients to stay in service is going to be the best possible strategy in the long run. What’s the obstacle to retirement? That you’re living on a fixed income from your savings for an indefinite amount of time. It could be ten years or thirty, and the amount of money you have doesn’t change. Continuing to earn an income is the only surefire way for your clients not to eat through their money.
Why No One Should Retire
By “never retire,” we want to be clear that we mean people should continue to work as long as possible. Most people go through a natural slowing down period, and that’s totally okay. We just think that making retirement the “goal” really takes away from the idea that life should be lived now—and all along the way—and not simply until you can stop working. With that in mind, here’s why you (and your clients) should remove retirement from the vocabulary.
- Retirement pulls people away from their Purpose, which can lead to a decline both mentally and physically
- Most people don’t have the funds to support a long retirement, or even a short one
- It perpetuates a cycle: children must care for their parents, so they save less for retirement, so their kids must take care of them
- The concept insists that work has to be unenjoyable, and life can only be enjoyed later in life
- When a leisurely retirement is the “outcome,” people settle for soul-sucking careers
- To afford retirement, people must make tough decisions: disinheriting their heirs, selling meaningful assets, and more
Yeah, it’s a lot to think about.
So why aren’t more people trying to overhaul the idea of retirement? Because we’re stuck thinking that it’s “just the way things work.” Fortunately, we know better. We know that life can be enjoyed now, and all along the way, and that there are better ways to reach financial milestones than what financial media has taught people. It’s up to us to help our clients see that, too.
5 Ways to Help Your Clients Remove Retirement from their Vocabulary
Overhauling retirement culture starts with you, and your relationship to clients. First, you have to lead by example. Create time and money freedom now, build a legacy, and show that it’s possible to be fulfilled now and never want to retire. As an advisor, you’re also in the unique position of being able to inspire clients to have a more Prosperous outlook.
Below are values you can live by and share to inspire clients to “never retire.”
1. Love What You Do
It’s simple, yet it works. When you truly love what you do, you want to do it for as long as possible. Even better, if you can continue to identify what you love, and what you don’t, over your lifetime, you can continue to have a fulfilling career. Things change, people grow, and what works today might not always work tomorrow. Being able to prioritize enjoyment and fulfillment in your career makes it sustainable, even if you’re doing something different ten years down the road.
So, you see, the secret is not necessarily to find one thing and keep doing it. The secret is to continually prioritize what you enjoy, even if it changes. This, alone, can solve the income issue, because it acts as an insurance policy against retirement. Why stop working if you’re always able to maintain or reinvent a career you love? You won’t, if you can help it, which means you can keep earning an income indefinitely.
2. Create Cash Flow
It’s not the Net Worth that defines Prosperity, it’s cash flow. Someone who has cash flowing in and out, and can make it work in their favor, is going to be better off. It doesn’t matter if they’re working with $1 million or $100k. Someone who diligently saves into a whole life insurance policy for a decade can probably invest in a cash flowing asset, for example. It’s all about playing the long game and building streams of cash flow. This doesn’t happen overnight.
Once you create one opportunity, the next becomes easier, and the next. Cash flow creates freedom. It allows entrepreneurs to be more discerning with their time. Passive income can mean that someone who works 40 hours a week might cut back a bit and spend more time with family, or take more vacations. Once your client has this mindset and can build toward this, they’ll see that it’s possible to travel, spend time with family, and relax right now. And that extra time makes a difference in someone’s desire to retire.
3. Emphasize Financial Responsibility
We mentioned the vicious cycle of retirement, and how families often get sucked into supporting one another at their own detriment (thus perpetuating the cycle). The thing about families is that there’s a lot of love there. No parent wants to deny their kids an education, just like no child wants to see their parents go without care. The problem is that these are major financial decisions, not a dinner bill.
One way to stop the cycle early is to help families talk about financial responsibility while the kids are young. This might begin by having discussions on education costs. As you likely know, those costs can quickly eat away at retirement funds, and parents will never see those dollars (or what they could have earned) back. Facilitating the discussion with parents and kids, and helping parents encourage kids to take some financial responsibility can help ease this cycle.
That may mean encouraging children to take high school seriously, and pursue good grades and scholarships. It might look like helping parents encourage kids to save money from their job. Your support could even be to help kids learn about loans, and what those might look like in their future. The goal isn’t to kick kids off the path of college, but rather have them be informed of what they can do to lower those costs. In turn, this helps parents save money (and hopefully it may encourage them to take financial responsibility and choose to delay retirement).
4. Rest Now, Not Later
The crux of the retirement issue is that everyone believes that they’re finally going to get to do all the things they put off. They’ll travel and eat at nice restaurants, and dozens of other expensive dreams. They don’t think about how long that money will stretch. Most people think $1 million will be plenty, without considering that $1 million is only ten years of income at $100k.
We have to stop treating retirement like the promised land. The time to rest and enjoy life is now, or all along the way. For some people, it might mean there’s a few years of “hustle,” and little rest. But that hustle should eventually pay off and create some breathing room. For other people, that may mean saving and living lean until they can create some passive income. By saving and being in a position of cash, opportunities will abound. That’s how your clients can build wealth, which in turn can allow them to do all the things they want now: to take vacation, to travel, to be with family, to rest.
5. Savings Creates Opportunity
Cash is critical. It allows you to partake in opportunities and make choices about how and when you do certain things. Saving into whole life insurance can give your clients’ money that is useable for both emergencies and opportunities. This pool of money can help them build their dream life over time, and also create a lot of peace of mind.
Benefits to whole life insurance include:
- Liquidity; money is accessible at any time for any reason
- Certainty; insurance is backed by guarantees, and is not correlated to the stock market
- Leverage; you can partake in opportunities without losing the effect of compounding interest
- Longevity; this is an asset that lasts your whole life, and can benefit you at any stage of life
- Multi-purposes; a tax-advantaged way to save for any purpose.
Empower Clients to Never Retire
Retirement comes from a place of scarcity. People operate as if their working years are scarce of joy and freedom, and then use what resources they have to enjoy everything at the last minute. This simply isn’t true, or sustainable. Teaching clients to find fulfilling work, save more money, and create opportunities can put them on the path to wealth. And those on the path to wealth see the power of living life to the fullest now and delaying retirement for as long as possible.
To learn more about how to empower clients and help them take ownership, we encourage you to sign up for one of our PEA memberships.