Many Americans approaching retirement work with a financial professional to ensure effective planning with respect to their savings and investments, but that doesn't mean they are fully preparing themselves for life after work.
In fact, according to a survey conducted by Lincoln Financial, far too few late-career workers are spending the time needed to actually map out and envision what retirement will look like from a behavioral and budgetary perspective. How will they actually spend the time they formerly spent at work? How will the effort to enjoy one's passions and interests across different phases of life align with their actual retirement budget?
As John Kennedy, Lincoln's chief distribution and brand officer, recently told ThinkAdvisor, these are key questions that advisors should be bringing to their late-career clients' attention. Yes, the dollars and cents of retirement are incredibly important, he said, but they are only means to an end.
"Advisors owe it to their clients to help them create a real lifestyle — complete with time and funds to explore these passions and pastimes — and to ensure that loved ones can be part of this plan," Kennedy said. "More energy must be put toward a plan for these activities."
What Lincoln's Survey Found
As Kennedy explained, the survey data shows that 87% of individuals in their 50s and 60s who work with a financial professional have discussed an investment strategy for retirement. However, only 53% have discussed a budget for their favorite activities.
At the same time, nearly half (48%) of individuals aged 50 and over who work with a financial professional but have not discussed budgeting for their pastimes in retirement have grown more worried about their finances in recent years.
"Those approaching retirement today have no plans to slow down, and that's what so many are overlooking in the planning process," Kennedy said. "We need to help the next generation of retirees ensure their pastimes last a lifetime, and this research is a clear indication that there needs to be more of an emphasis on planning to do the things that you love, especially when you finally have time for them after your working years."
Pursuing Pastimes in Retirement
As Kennedy emphasized, pre-retirees and retirees have a natural desire to spend retirement pursuing their passions and pastimes. These range from traveling, volunteering and experiencing the arts to exploring outdoor activities and simply socializing with friends and family.
