The complex world of Retirement Planning.

I have been a dedicated Employee Benefits/Retirement Consultant for the best part of 30 years. Each year I learn more about the crazy concept of retirement and retirement planning and each year I remain optimistic that the industry will find a silver bullet, a holy grail, that will make planning and saving for retirement easy and understandable.  I have seen firsthand the trauma of turning 65 and not having sufficient funds to retire. It makes me wish that I had a magic wand to make abundant retirement funds available for everyone.

When I was first starting out in the industry the process of retirement planning seemed easy. Save as much as you can, for as long as you can. The logic was that if you saved for 40 years your capital would be sufficient to ensure a good lifestyle in retirement. Within the industry, the sole focus was on the monetary issues involved in retiring at 65. Back then, most retirement brochures showed aged Caucasian couples at sea, glowing at the prospect of spending their remaining years on holiday. This idealized depiction was, and still is, a far cry from the retirement experiences of most.

Consulting daily with clients and companies is a constant education in the layers upon layers of complexity in the planning that goes into retirement. A client informed me recently that although I am likeable, their staff find explanations of pension funds and their paths to retirement to be complex and difficult to understand. It’s fair feedback; people want the pretty picture and optimistic outcome, not the hard work and the complications. People want the beer budget and the champagne outcome. Warren Buffet said that price is what you pay and value is what you get. Within the context of retirement planning there is a massive disconnect between the price that we are paying and the reality of the value that we receive.

For the younger members of society, those who have yet to reach their third decade, the power of time and compounding on their pension fund is miraculous. However, most in this age demographic lack the wisdom, experience and insightful discipline to leave their retirement savings untouched. Money is like the proverbial apple in the garden of Eden. It represents temptation and many of us are like Adam and give in to the temptation and eat the apple. In other words; we cash-in our pension savings when changing from one employer to the next. When you’re young, the concept of retirement is intangible and a concern for a distant version of yourself. It’s easy to believe that you can tap into your pension now and make up the difference later.

 Sounds easy, sounds possible and doable. But reality is complex and the human condition, with its’ poor decision-making, complicates life and retirement planning, further. If we cash out once, it’s easy to do it again and again until it eventually becomes a habit. It is far easier to cash-out than it is to save and preserve. Let’s be honest; we like things fast, easy, and convenient.

When those who have given-in to cashing out their pension funds over the years find themselves 15 years shy of retirement they often realize that the savings necessary for them to retire are so vast and burdensome that they are defeated before even trying. The good thing about money and savings is that we can measure it. The sad thing about our behavior is that we are not truly able to measure it in terms of future outcomes. Actions and inactions today have long-term consequences for us when we no longer work. For the rare individual who has dedicated their adult life to the discipline of saving there is a good chance of maintaining their lifestyle when they stop working. For those of us who do not have sufficient funds at retirement; is it the end of our life journey? Is it the end of our joy, our love, our life? The answer is no it is not, it is just another beginning. Money and capital are enablers. Thankfully, life is rich in its complexities so we can survive, thrive, and reinvent ourselves.

My personal challenge as an agent in this industry is to simplify my consulting and try to make saving for retirement exciting, accessible and straightforward for my clients. If that requires me to transform myself into an entertainer, a story teller, or a magician: then so be it. I wish I could wave a magic wand and take away my clients’ stresses and concerns about their retirement planning. Better yet, I wish my magic wand could give everyone nice juicy retirement funds so that we could all live-it-up in our Twilight years.  But I cannot. The best I, and anyone in my field, can do is to connect with our clients and their values and create positive relationships and understandings between people and their pension funds.

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