All the Money in the World Won’t Make Your Retirement a Success

The Strategic Value of Non-Financial Retirement Lifestyle Planning

 

All the Money in the World Won’t Make Your Retirement a Success - The Strategic Value of Non-Financial Retirement Lifestyle Planning


Retirement planning has long been thought of as “save as much money as you can to live off of for 20-30 years.”

Great, you have the money set aside to survive 20-30 years… now what will you do for those three decades?

What will make for a fulfilling next act of your life? According to a 2020 Edward Jones and AgeWave study, 8% of people think of retirement as the beginning of the end in regards to their life. However, 55% view retirement as a “new chapter in their life.” 

Partners at Next Chapter Lifestyle Advisors, Susan Latremoille and Marianne Oehser, provided some insights into planning the non-financial aspects of retirement. 

The Personal Side of Retirement Planning

There are an abundance of retirement advisors that educate individuals on the financial aspects of their retirement planning. However, these advisors tend to neglect education around their client’s personal needs. Especially for successful business owners, planning a comprehensive personal retirement lifestyle plan is paramount. According to a recent Exit Planning Institute Study, 26.23% of owners have not thought about what they will do after they exit their business.  

Who Will You Be Without Your Business?

Susan shared the story of a client who tried to fill the void created by selling his $100 million aerospace business by buying vacation homes and fancy cars. He was trying to, as Susan put it, “replace the thrill of running his business”, but it does not work that way.   

As Marianne shared, “You are not just retiring from your career, you are retiring to the next phase of your life. Plan for it.” Susan and Marianne shared that 69% of people struggle to adjust to their new retirement life. In retirement, so many aspects of successful owner’s lives change. They go from being the “Who’s Who” in their respective industries, to “Who is that?” seemingly overnight. Many business owners are not prepared to address these changes and suffer an identity crisis. Being a business owner was their entire life, and now that part of them is gone. 

Retirement Mindset

Susan and Marianne believe that every retiree thinks about retirement with one of two mindsets. 

Fixed: The best years of my life are behind me. I am over the figurative hill and the rest of my life will be downhill from here.

Growth: The best is yet to come. I am looking forward to experiencing this next chapter of my life. 

Business owners might have had a growth mindset when it came to their business, but a fixed mindset in their retirement. In order to get the most out of your retirement, Susan and Marianne educate owners on how to make that switch to a growth mindset. 

The Retirement Honeymoon 

We have all heard the old retirement trope of the retired business owner spending their days on the golf course and living a life of leisure. What we don’t hear a lot is the fact that most retirees get bored of this lifestyle in 6-18 months. Susan calls this the “Retirement Honeymoon.” 

Even retirees with an extensive bucket list of items to accomplish are not prepared for a successful retirement. What do you do when the last item on the list is checked? Without a detailed lifestyle plan, your retirement will feel less like the long vacation you envisioned and more like Groundhog’s Day, forced to repeat the same day over and over again.    

What is Your Purpose in Life?

Every human being has the fundamental need to feel like their life has a purpose. For retired business owners, their purpose was intertwined in their business for so long that they struggle to find purpose in their post-exit life. Marianne says, “Your impact has nothing to do with the scope of your purpose. You can have an immense impact on the world around you with a specific purpose.”

In order to have a meaningful life, and retirement specifically, you’ll need to cultivate your strengths, talents, and capabilities and use them to benefit others. People who have a clearly defined purpose in life live years longer than those who have no sense of purpose. According to an article published in Forbes, “Spend your time now figuring out what you enjoy doing, so that when you’re retired and have the additional time, you can spend that time doing what brings you happiness. Maximize your time during retirement by focusing the pre-retirement years on discovering what brings you joy and fulfillment.”

Before you retire, think about the things in your life outside of your business that give your life meaning and purpose. Perhaps it is spending time strengthening your family relationships, tending to a garden, or expanding your knowledge by reading about topics that interest you. Whatever gives your life purpose should have a place in your post-business life.   

Emerging Needs of Retiring Business Owners

Retiring business owners face more concerns than getting an early tee time on their favorite golf course. Some of the most prominent issues they will face are the possibility of divorce, failing to fulfill their post-business needs, and lacking personal fulfillment. 

The Threat of “Gray Divorce”

Retirement has a profound impact on married couples. After years of focusing on their career, retired owners have likely spent more time with their spouses during retirement than they ever have. This can lead to tension in their relationship and can ultimately lead to “Gray Divorce”, divorce in couples over 50 years old. Marianne shares, “Often couples don’t talk about how their new life is going to unfold in retirement. When they are not on the same page, it creates friction in the relationship. The little things add up to create problems in the relationship.”

Conversely, relationships can strengthen due to the increased time spent together. With the lack of time spent working on and in their business, retired owners have time to focus on their relationship with their spouses.  

Working in Retirement

More individuals are looking to work during retirement. After the “retirement honeymoon” is over, many retired business owners crave the mental stimulation and problem solving that come from work. Our Nebraska 2019 State of Owner Readiness report found that 31% of retired owners planned on either becoming a business consultant or starting another business after they exited their previous company. Owners desire to make a contribution towards an end goal. Going back to work offers them an outlet to do so. 

Next Chapter Lifestyle Advisors Happiness Portfolio ®  

Next Chapter Lifestyle Advisors created a system to ensure that all retiring owners are personally fulfilled in their retirement. Most advisors focus on the financial component of retirement, but the Happiness Portfolio encompasses everything an exiting owner needs in order to have a successful retirement. 

This portfolio includes the replacements for the non-financial benefits of working and provides retired owners with a sense of purpose. In utilizing this resource, retirees are able to stay engaged with activities that support and enhance their body, mind, and spirit. 

The main components of the Happiness Portfolio include:

  • Professional
  • Primary relationship
  • Family and friends
  • Giving back
  • Spiritual and emotional health
  • Leisure
  • Self-development
  • Health and aging

Adding Lifestyle Retirement Planning to Your Advisory Practice

The wealth management industry is changing. Competition for clients has increased making it harder to retain existing clients and attract new ones. Advisors need to offer enhanced services to differentiate themselves and to justify their fees. At the same time, clients have high expectations for life in retirement and are challenged as they try to adjust to this new chapter of their lives. This all makes retirement lifestyle planning a valuable new service.

It is your responsibility as an advisor, especially a Certified Exit Planning Advisor, to be holistic in your process with owners as they exit their businesses. Instead of solely focusing on the financial aspect of their decision, have deeper conversations about life topics. Susan says, “emotional intelligence is just as important as technical skills, if not more, for advisors to be successful.”  

Educate your clients about the importance of planning for their lifestyle and collaborate with their other trusted partners. Offering a value-added service like “retirement lifestyle planning” offers your clients more information about planning for their personal retirement. Educate your owners to let go of their past successes and to move forward with the next chapter of their life. It will be a good chapter if they plan for it. 


Follow our social media accounts for more exit planning content and strategies.