How to Help Clients Mentally Prepare for Retirement: Advisors' Advice

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Advisors who spend a lot of their time working with clients preparing for retirement know that many people have a tendency to focus almost exclusively on the financial aspects of planning.

The questions are familiar: How much do I need to ensure I can have a stable and enjoyable retirement? How should I construct my investment portfolio? What level of expenses should I anticipate and how can I prepare for unexpected emergencies?

To be clear, the financial burden of preparing individuals for retirement in a working world increasingly bereft of employer-provided pensions is a significant one. Any given healthy retiree who leaves the workforce in their early to mid-60s can expect to spend 20 or even 30 years in retirement, and they will need substantial resources to see themselves and their family through that journey.

However, experienced advisors also know that getting the financial picture in order is only part of the retirement equation. Also critical is addressing the mental aspects of retirement.

Simply put, many older American derive a significant amount of personal satisfaction from their work, and one’s career often becomes an important component of one’s identity. And, while many people assume they will enjoy the process of simply walking away from work and “kicking back” in retirement, in reality that is often not the case.

Apart from lifestyle considerations, advisors say there is also a challenging psychological burden that comes with transitioning from a saving-first to a spending-first mindset. Given that they spend decades watching their account balance grow and grow, it can be unnerving for clients to see things start to move in the other direction. Ultimately, it is the job of the retirement advisor to help clients tackle both the financial and mental sides of the planning equation.

Explore the gallery for some insights from advisors who are working on this challenge every day.

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