Financial Advisor Magazine: The Retirement That Works III
[box]Original article: Financial Advisor Magazine[/box]
An artist was asked what his favorite work was. He thought for a minute or two and then replied, “The next one.”How much thought have you given to your encore, should an encore transpire in your life? I was recently approached by the outgoing CEO of a broker-dealer who paid me a warm compliment by telling me that my book, The New Retirementality, had set him on a new path by redefining what fulfillment and balance could mean in his life. He decided on a reduced involvement with his firm and began to pursue other significant and meaningful matters, some involving work and some simply involving an investment of time.Most of us, according to a Rand Corporation study on retirement and “unretirement” trends, will require somewhere between two and four “encores” before we get it right–that is, find the perfect balance in our lives between work, leisure, family and all the other things we invest time in. Yes, retirement is ultimately an investment decision, and not just about money. The more important investment decisions are:
• How will you invest WHO YOU ARE?
• How will you allocate your time?
I am of the opinion that the question regarding who we are has received short shrift in the retirement conversation and has resulted in many About Schmidt-type retirements. For those who haven’t seen the movie, Jack Nicholson plays a 60-something retiree going through an existential crisis, no longer knowing who he is or why he matters. Personally, I found it to be spookier than The Shining. Most men are so unprepared for the realities that come crashing down around them: Their golf game isn’t getting better, their family doesn’t want them visiting that much, their spouses need space, and they don’t know where to ply a lifetime of know-how and know-who any longer.
We can do so much better than this. And the first step is expanding the conversation into the arena of investing “who we are.” The old retirement conversation was, “How will we invest your money so you can retire comfortably?”
The New Retirement conversation includes that question, but also asks, “How will you invest yourself and your time, as well as your money?” One method I have created for getting at the investment of who we are is to guide people in a conversation around “working benefits”–that is, what we derive from our work that is worth keeping in motion at least part time.
Beyond the paycheck, why do you work? Look at the following list of qualitative benefits and ask yourself, “Which of these do I get the most of from my work?” And then ask, on a scale of 1 to 5, “How important is each aspect to me?”
1. Physical Health/Energy
2. Intellectual Satisfaction
3. Creative Stimulation
4. Social Stimulation
5. The Feeling of Making A Meaningful Contribution
6. A Sense Of Relevance
7. The Ability To Solve Problems
8. Engagement/Doing What You Love
Every month it seems I meet new examples of “Encore Retirement”–individuals who treat their lives as an evolving mission and exploration. They are not content to sit around and watch TV or simply bide their time with random “busyness.”
An inspiring example of this approach in the financial advisory world is Ron Cordes, co-chairman of Genworth Financial Wealth Management. Ron co-founded and then sold AssetMark Investment Services to Genworth Financial in 2006. He is also the co-founder of the Cordes Foundation, which he and his wife Marty created in 2006.
In an interview with Fast Company last November (“Impact Investor: Finance Guru Ron Cordes Is Pointing Billions of Dollars in Better Directions,” by Lisa Katayama), Cordes says, “I spent the first half of my life building businesses designed to be the best in the world. … For the second half, I really want to support businesses that are the best for the world.”
Cordes was looking for a way to link his “passion with his portfolio” after a life-changing trip to Uganda. He visited a village with scores of widows who had lost their husbands in the 20-year civil war. He decided to fund a microfinance program there that has helped many of those widows launch successful ventures so they can support their children. He recalls a woman coming up to him and saying, “We appreciate it when [white people] come to try to save our children, but we need to be able to save our own children. Thank you for investing in us so we can do that.” This was a moment he would never forget. Fast Company called it a “midlife crisis gone horribly right.”
Cordes’ epiphany was that “empowerment was more powerful than pity.” He decided to capitalize on his skills and expertise as a financial manager and use them in a way that would create more opportunities like this around the globe–where deep and persistent needs exist. He’s calling this venture ImpactAssets, and the firm is involved in many ventures including microfinance, fair trade, sustainable timber and renewable energy in the developing world. Cordes says, “Impact investing offers an opportunity to tap a giant new capital source to create sustainable, scalable solutions that can have potential game-changing results.”
Now this is what I call an encore!
It is the model going forward for those who want to continue to collect the benefits of work. Not only are Ron Cordes’ efforts making a difference in many lives, but he personally is reaping many benefits as well: He is making a meaningful contribution, solving problems, finding a deep sense of personal relevance and inspiring engagement. These are the transcendent payoffs of work–and we can no longer afford to ignore them in our retirement discussions.
The new math of the New Retirement not only includes calculating how to best deploy the financial assets we have, but also capitalizing on all the assets of our persona and identity. This is our social and soul capital, and it is the next great frontier for financial services–unifying the discussions of monetary and social asset management. There will be more to follow on this topic. For now, let’s accept the fact that while the discussions we have had around retirement have brought us to this place, they cannot take us from this place. It can no longer be a “retirement” discussion but must become an encore discussion that helps clients define their next act.
I’m confident that if you asked either the CEO of the broker-dealer I mentioned at the beginning of this article or Ron Cordes what their favorite work was, they would reply, “The next one.”
Mitch Anthony is widely regarded in the financial services industry as an expert on building client relationships and has been recognized for his pioneering work in Financial Life Planning. His innovative tools for strengthening client relationships are available through his Advisor InsightsTM at mitchanthony.com.