With Robert Laura, Former Social Worker, Retirement Activist, Syndicated Columnist for Forbes.com and Financial Advisor Magazine
Podcast: Play in new window | Download
Steve continues his conversation on retirement preparedness with Robert Laura, a social worker turned financial planner who writes a blog in Forbes and concentrates on the monetary and psychological aspects of retirement.
Surprised when his home inspection failed, Robert developed a retirement priorities quiz, which anyone can take at retirementproject.org.
In Steve’s financial planning practice, his process includes “honest conversations”, a card game where he asks people to prioritize things that are important in their life—whether they feel secure in their current retirement income stream, whether their current rate of saving and investment will meet their needs in retirement, and what they expect to do in retirement. These questions address both financial and non-financial aspects of retirement planning.
Addressing The Gap
Reviewing a retirement checklist with a qualified financial advisor will also help individuals determine if there is a gap between their retirement income sources and their level of spending and help them come up with strategies to boost savings and investments or to cut back on expenses if necessary.
In retirement calculations, many do not consider the impact of inflation, higher health care costs, and the like. Additionally, the psychological aspects of retirement such as finding engaging things to do are often ignored.
Robert believes the current model for senior centers won’t exist in the next 10 or 20 years because today’s baby-boomer retirees want to be active, engaged, and cool; hence, the typical senior center is not a good fit.
Socially Engaging Fitness Centers
Turning to health and fitness in retirement, Robert’s research shows that today’s boomers prefer human contact and shy away from technology-infused gyms; so he anticipates more socializing-oriented fitness centers for the 50+ crowd.
Filling In The Identity Void
As Steve has pointed out before, a new retiree’s sense of identity is tied to his/her profession which retirement takes away, leaving many to struggle with a bit of an identity crisis. Instead, Robert recommends developing a hobby or a passion—be it music, art, astronomy, reading, writing, investing, etc.—a few years before retirement in order to have something to keep you engaged later in life.
Here’s another question on Robert’s retirement priorities quiz: Have you been invited to participate in four or more events with friends over the last month that are non-work related? He poses this question as a crucial wake-up call to make sure people engage with people outside of the workplace and fully understand the importance of social interactions. Moreover, research increasingly shows that people are happier, have fewer cognitive problems, and live longer when socially engaged.
Robert’s retirement priorities quiz is a must for people of all ages, those just entering the workplace as well as those close to retirement. In addition to taking the quiz, Steve recommends Robert Laura’s book, Naked Retirement: Living a Happy, Healthy & Connected Retirement and speaking with a financial advisor about your retirement checklist.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: I’m speaking with Robert Laura. He’s a financial planner and a social worker. And he writes a blog in Forbes, a good retirement blog in Forbes, I highly recommend it. Also, you can find out more information about him at retirementproject.org, where you can take this quiz that I mentioned in the last segment.
I want to move on just a little bit. We, in my practice talk, sit down with people and do a process called honest conversations, which is a card game where we ask people to prioritize things that are important in their life. And of course, when it comes to retirement, we ask questions like, do you feel secure in your current retirement income stream, and do you feel that today’s income will meet your needs in the future? All these questions that you’re asking in your questionnaire, and I know that you ask when you sit down with people and that we ask, their purpose is to help to quantify this thing called retirement. And let’s talk a little bit about the tools that you use once you get the answers to these questions. What’s part of your process?
Robert Laura: I think a big part is, I think it’s playing both sides. Which again, that’s why I like working with you and being on this show because the advisory world is changing. It’s not just about the dollars and cents in both sides, but like you said, you do have to start by quantifying things. You need to identify income sources and how much they can generate. Then from that point, be able to go the other side as well, the non-financial stuff.
Steve Pomeranz: Yeah, you’re going to have income sources. You’re going to have a certain level of spending and then you’re going to have this gap, most often, between the two, what’s going to make up the gap. Well, it’s going to be your savings and the ability of your savings to generate what you need. Not only the income that you need today but also taking account of inflation, of, perhaps, as you mentioned in a previous segment, higher health care costs and the like. All of these things have to be factored into the equation. But it’s the psychology, as well. Here’s something else that you wrote that was interesting. That one of the stumbling blocks new retirees are finding is a suitable outlet for achievement. And you mentioned senior centers and how they’re really losing their popularity, tell us about that.
Robert Laura: Yeah, so kind of our estimation is that senior centers won’t exist in the next 10 or 20 years because today’s retirees are very different.
They want to be active, engaged, hip, cool, and fun. And that’s not what you typically get with a senior center. Now I’m not downplaying senior centers. I think they provide a lot of value for people. However, the boomer, the new retiree’s looking for something more. And again, I think the challenge is we spend most of our lives working towards something.
And all of a sudden we find ourselves in retirement without any specific goals. And that’s why, again, finding ways to set new goals and then to start working towards them is essential for a successful transition.
Steve Pomeranz: Well, senior centers are going to have to change to meet this more dynamic and active group of baby boomers, that’s for sure.
Another unexpected trend that you discovered was that an increasing number of baby boomers are intimidated by the gym. What’s that?
Robert Laura: Yeah. [LAUGH]
Steve Pomeranz: Yeah.
Robert Laura: It was interesting because as I was kind of polling these different groups, they struggled with it because once again, what I have found, especially with baby boomers, is they like to be around each other.
And so, whether it’s talking about starting a business or working out, they want to be around their peers. And a lot of times when you go to the gym, now they’ve got technology hooked in, there’s a lot of people skimpily dressed and it’s just not the situation they want to be in.
So we kind of assume looking forward that more of the 50, 55 plus communities will develop their own fitness centers. And also, that they’ll be fitness centers just for the 50 plus group, so they can be around themselves and engage, instead of being around everybody else.
Steve Pomeranz: I noticed that in my fitness center when I look around, everybody is very serious there. They’re all very much concentrating on getting their abs done, or they definitely have headphones on and are in their own little worlds. It seems to be very little social interaction. I think what you’re saying is that boomers don’t really see it that way. They just want to stay healthy, but also they’re not really trying to achieve some kind of athletic outcome. They just want to live longer, basically.
Robert Laura: Well, yeah, and it’s about functional fitness. And they want to be healthy. But you’re exactly correct, they want to socially engage other people. I’ve been going to my fitness center for close to five years, and they still don’t greet me by name or say hi. And that’s the type of service I think boomers want. They want to know people when they go in, they want to feel comfortable. Get their workout in, but also have some social time as well.
Steve Pomeranz: Yeah, and I think they want a locker and kind of some of the amenities that would come with a good fitness center that was catering to their needs. Yeah, so we’re talking about improving and maintaining health and wellness, that’s really important in retirement. What about having a hobby? One of the questions that you’re asking is, “Do you have something, some specific focus that would carry you through retirement?” Tell us about that, what you think about that?
Robert Laura: Yeah, it’s one of the most important things. A lot of people haven’t answered the question, “Who are you when you’re not working?” And so how will you replace your work identity, fill your time? In a lot of situations, it’s about finding a passion or hobby to leverage your time.
But a lot of people haven’t thought about it or they think they’re going to easily acclimate to it. It’s very common out there to say, you need to retire to something. What I tell people is you need to retire with something. There’s nothing magical about retirement. You’re just not going to pick something new up. And so it’s important that, before you retire, to start to do some of these things, rekindle that hobby or passion, rather than hoping it’ll figure itself out once you get there.
Steve Pomeranz: Yeah, I mean, it could be music, it could be art, it could be astronomy. It could be restudying the classics. It could be going to school and really learning how investments work. I mean, I think it’s an infinite variety of areas that people can move to that maybe interested them years ago before they were working and they got into their current career.
Robert Laura: And I think the important thing is there’s so many things.
The key is, and this is why I like your honest conversations, is to start to nail that stuff down to be more specific, to not go in with this vague idea that, I’m going to do this because if there’s an actual plan, the transition goes much smoother.
Steve Pomeranz: Yeah, we put that in the category of grow as a person, expand my passions, asking, you know, tell us about how you want to grow as a person, professionally or spiritually, through more experiences.
What is the financial and time commitment involved in doing something like that, especially the financial commitment, to make sure that your spending continues to meet your resources? What areas of growth are you focused on, and do you have a plan to start to attack them? A lot of people want to travel, but travel can be something that gets old after a while.
Or if you are investing in new ideas and new challenges and things that keep your interest, travel can last throughout the many, many years. All right, let’s go back to your question list here. So I like this question, “Have you been invited to participate in four or more events with friends over the last month that are non-work related?”
Robert Laura: [LAUGH] Well, I think the key thing too there is a lot of people, their relationships are tied to work. And so one of the things that we want to make sure people balance out is that they’re engaging people outside of the workplace because when you make that transition, once again, a lot of people don’t really understand the importance of social interactions in their social network. And so the question is designed to be a wakeup call to say, “hey, are you being invited out? Are you engaging people?” Because you’ve got work as an outlet right now, but in the future, what’ll happen when you have all day if you don’t have those interactions?
And so it’s a crucial question.
Steve Pomeranz: And I think other studies have shown that that leads to longer lives, those people that engage with others. Now it doesn’t have to be four a month, it could be two a month. It doesn’t have to be a certain amount, but I think it begs the question, do you have a social life and is that important to you? All right, finally, do you feel your retirement plan is well balanced for successful transition into your next phase of life?
What are some resources that you found? I know you speak to a lot of groups about this, where people can actually go and start to find out some of the answers themselves.
Robert Laura: Well, I think there’s a lot of good books out there, and there’s more books coming out about retirement. It’s why I wrote my book, Naked Retirement, which helps you plan for these non-financial pieces. And that’s where I think, to your point earlier, Steve, where how do people want to grow, I think it makes sense for new and soon-to-be retirees to enroll in adult education classes about investments or about this non-financial planning part of retirement. There’s a lot more stuff out there today than there was ten years ago. So, books, my website, retirementproject.org. We got a couple of free guides that people can use, as well as the priorities quiz that you’re talking about.
Steve Pomeranz: My guest, Robert Laura, social worker turned financial planner. We’ve had a great discussion about both the monetary and the psychological aspects of going into retirement. You can follow his blog on Forbes and as well as the retirementproject.org that he just mentioned or get his book, Naked Retirement. To hear this segment again and to hear all of our archive shows with regards to retirement and so many other topics, don’t forget to go to StevePomeranz.com.
Hey, Robert Laura, thank you so much for taking your time to join us.
Robert Laura: Thank you, appreciate it