THE LESS OBVIOUS CHALLENGES FACED WHEN RETIRING

What may seem trivial to some can be a significant concern and a source of worry for others.

When preparing our clients for retirement, we usually discuss all the hard facts, including how much money they’ll need to meet their objectives, what investment strategies they’ll need to adopt to meet these objectives, whether they have medical aid and gap cover in place, etc.

As such, many advisors have become more skilled in dealing with the softer aspect and psychological side of retirement, assisting clients to a more meaningful retirement and the second half of their lives. However, we occasionally get tripped up by what we consider to be minor “non-issues” that are otherwise at the top of the priority list for retirees or soon-to-be retirees.

Recently, I encountered two such scenarios, which have now become the first item on my agenda for future meetings with these clients. What I consider important doesn’t matter. What is most important to my clients, what is on their mind, and what is their primary worry, is what I must address first.

It is essential to recognise that what may seem trivial and insignificant to some, can be a significant concern and a source of worry for others.

My first client is a well-educated academic who is retiring from a major university. I have known him for many years, and I am aware that he is meticulous and a stickler for details and procedures. He doesn’t like “airy-fairy” approaches; he wants facts, figures, and information that he can analyse and question. We have been preparing for this day for the last six years.

There was a lot of back and forth, and all the plans were put into motion, with all the figures working in his favour. During our last meeting over lunch, I asked him about everything that was happening and all the changes he was about to face, to find out if there was anything that worried or concerned him.

I was a little surprised when he mentioned that his biggest concern was that his money would disappear while being transferred from his retirement fund to his living annuity. He doesn’t trust the system much. At first, I thought that he was joking, but then I realised that he was genuinely stressed about this. I couldn’t just brush this aside lightly; I had to address it earnestly.

In the second scenario, I was reminded that the little things in life are frequently more significant than the major issues during my discovery conversations with new possible clients.

I met a married couple I didn’t know at all. Generally speaking, these conversations can be challenging because people don’t initially want to share too much personal information when meeting with strangers for the first time.

Sometimes, years after our clients first became our clients, we find out more about them and their wealth. I have no idea why this occurs, but it does. For whatever reason, some investors would rather keep their assets and investments “hidden.”

The same applies to personal circumstances and family affairs, and this I understand 100%. One cannot expect full disclosure and for someone to bear their soul during a first meeting. However, it is essential to identify top-of-mind concerns when planning, especially if your service involves life planning, not just financial management.

During this meeting, we covered a lot of ground and determined the client and his wife’s wealth, as well as their future goals. They recently bought a retirement home, but continue to live in their old house. They seemed keen to move, but they were hesitant and something clearly bothered them.

Upon further discussion, they revealed that they will not be able to move into the retirement home with their family pet dog. The home did not allow pets. Some may snigger at this, but many retirees consider their pets to be extended family members. As we get older, we grow fonder of our pets. This was a major source of concern and stress for the couple because they saw no way to get rid of their pet.

In both scenarios, financial planning was not the major point of concern.

In the second case, fees and capital sustainability were a concern for Mrs potential client. However, these points of discussion were dealt with more easily than the discussion around their family pet. So, what was the outcome?

My long-standing educated client is about to retire from all his retirement funds, and his stress levels are at a peak. The administrator of his university retirement fund requested that he sign all the documents and return them via an encrypted email. More stress! He does not know how to encrypt attachments.

After my office failed to guide him telephonically on how to encrypt files, I offered to drive to him and collect the documents, so that they could be processed and encrypted through our office. He was satisfied with this arrangement. Hopefully, when he receives his first pension payment at the end of September, he will relax, and we will be able to take on the next challenge.

Take note of the date of the retirement payment. The amount of time it takes to get their first retirement income payment is frequently underestimated by retirees. After your last day of work, give yourself eight to twelve weeks. Since nothing can happen before Sars issues a tax directive on the lump sum, this period might be longer, particularly if cash is commuted. In the event of such delays, make sure you have enough cash on hand to sustain you for at least three months.

The situation with my potential new clients is still a work in progress. During our initial conversations, we established that the husband and wife are both in good health and reasonably fit. They are still completely capable of taking care of themselves, so there was no need for assisted living or medical attention right away. We talked about the possibility of renting out their retirement home on a yearly basis and staying in their current home for as long as possible, especially while their pet is still alive.

A follow-up meeting is scheduled soon, where we will revisit their situation. This will continue to be a recurring topic. People often don’t realise the trauma involved in either parting with a pet or losing one. Such events are considered significant transitions, and we will need to address them when the time comes.

My point here is not to underestimate the impact that even small events have on people. What seems insignificant to some can be traumatic for others. Any event that changes your living circumstances, circle of family or friends, your ability to go places or experience things you love must be considered as a major transition in life and must be handled accordingly.

Mostly, these transitions cannot be handled efficiently on your own. Having the support of friends, family, or a confidant will go a long way in making it easier.

Enjoy the second half of your life. Be free-spirited and celebrate your achievements.

Take care and seek help if needed. For everything we find difficult, there is someone else who considers it easy.