The Evolving Retirement Conversation

Due to a host of conditions and a massive population of Boomers joining the ranks of the retired, we’ve been staring down the barrel of what experts believe could be a looming retirement crisis, trying to find solutions. Do we raise the retirement age? Cut Social Security benefits, or raise taxes? Create options for annuitization within defined contribution plans? Look for other ways to help people accumulate wealth and protect their spending power in the face of rising inflation and market corrections?

These are all good questions, but they only address part of the problem: the accumulation and protection of wealth. And accumulating wealth is important to retirement, but it’s also important to remember that wealth is meant to be spent in retirement, not hoarded. It does no good for individual investors to sit on piles of money that aren’t serving or enriching their lives.

In February, RetireOne Co-Founder and CEO David Stone tackled the issue in an article for entitled “Reframing the Retirement Conversation.” Shortly after, Richard Eisenberg of MarketWatch published a related article, “‘Where should I live and what am I going to do?’ Retirement advice we’re not getting from financial advisors.” Here’s an excerpt wherein Eisenberg quotes Stone:

“Most investment advisers tend to manage money for total return and growing the nest egg,” Stone said. He’d like to see advisers spend more time helping people have better retirements, which may mean spending some of their savings.

Taken together, these two articles call attention to an idea that’s been gaining traction within the financial planning industry: that fiduciary responsibility does not end with helping clients accumulate wealth and protect it, but extends to enabling them to use it to have the best retirement possible. It’s an argument for a more holistic approach to financial planning, one where the starting point isn’t “How much do I need to have saved by the time I retire?” but “What do I want to be able to do in retirement, and how do I put myself in the position to make that happen?”

The 2020s appear to be a decade defined by anxiety and uncertainty, and a great deal of that is anxiety about the future. Many people are unsure that they’ll be able to retire when they want to, and many who know they can retire are unsure what that looks like. David Stone argues that we should reframe the retirement conversation. Maybe it’s time for the industry as a whole to join it.