For how many years now, have we heard ourselves say that the pre-Christmas selling season starts far too early? By the time we get over the final echo of the last holiday ad jingle that seems to leave a ringing in our ears well in to January, that other selling season begins – financial planning season. At least in Canada it’s a time that goes on and on almost as long and as loud as that pre-Christmas season.
If you haven’t heard them yet, those constant ads prodding you to capitalize on your retirement planning vehicles, then likely your ears are still in pain from those lingering jingle bells. The most common refrain is the call to action for the Canadian deadline for contributing to Registered Retirement Savings Plans (RRSP’s) to meet the 2017 tax year-end. You have another month and a half to go, listening to that messaging; and then your ears will be ringing until April 30th tax time.
Sadly, for many people, it is right at the time they are paying off their credit card Christmas spending, that this RRSP decision comes in such a compressed timeframe. Of the many insights I’ve received from respected professionals I know in the financial planning world, this last minute once a year attention to RRSP’s is not the way to go about it. Holistic financial planning requires more realistic check-in conversations throughout the year and it is a continual recalibration exercise during our entire life course.
“Retiring” retirement with your countdown clock in hand
While this post is not by any stretch a dissertation on the ins and outs of how to attain financial planning mastery, it should go without having to say that it’s not all about RRSP’s. And for that matter it’s not all about that R word – RETIREMENT.
First off, why I think it’s so awkward that we trip over that word is that we still treat the concept of retirement from a 20th century model, like it’s a destination pegged to a certain age, in a 21st century where life expectancies are in the main longer. And oh yes, as we are constantly reminded, demographically speaking over the next decade – it’s going to be crowded on that stretched out landing pad.
We have been ruminating on this for years now, trying to rework this word retirement and we are still awkwardly tripping over it while younger generations are modulating retirement vocabulary as we hang on to financial and retirement planning legacy language. If you allow yourself to listen widely in and outside your immediate social circles, philosophies and attitudes to later life and so-called retirement are as variant as can be captured across all age cohorts.
Yet even in the eclectic views shared in Boomer conversations, words trip from having an encore life or third quarter career, reframing or redirection to “retiring” retirement. Not sure what you hear, but on the flip side, I hear almost as many people say that they can’t wait to retire (with countdown clock in hand), and if you asked how they might reframe that you might get a blank stare or at best, my favourite – a hearty debate.
It’s all in the language and life perspectives each individual holds. Progressively, over the last twenty years this changing outlook on later life expectations has largely been driven by those boomer generation conversations, as they garble over the retirement planning verbiage that lingers from the 1970’s. Many at the same time often talk about “working in retirement” (by desire and/or necessity). Well if you are older and still working in some way, shape or time percentage then are you really in retirement?
Financial planning encounters, have you had the “behavioural nudge”?
For some time my take on this, in a playful attempt to recode language in the financial planning world, is that if we are too assume greater life expectancy beyond the still normative “working age years”, benchmarked 15-64, then what we really could say is that we are “financing longevity”. In my encounters with financial planners, I’ve floated this notion as being a differentiator in marketing language. Never had a negative response, but most often it’s seen as, well – awkward.
Not so for Lynda Gratton in her book, co-authored with Andrew Scott – The 100-Year Life. Chapter 7 titled “Money: Financing a long life”, underscores exactly what I’ve been long suggesting. On page 166, in the section “account for a future self”, at one point it reads: “If we were able to plan optimally… creating a sense of identity over a long life, one which recognizes the interactions between yourself today and your future selves, is a crucial component of a successful 100-year Life.”
One way of naming this is doing what the book calls a “behavioural nudge”, suggesting for example “imagine your 80-year old self sitting next to you – what would they want you to take into consideration?” This nudge concept is exampled by a cool image of an “ageing digital avatar” (as shown here),which was used in a study, where people who were shown this decided to save more than twice as much as those who didn’t get the nudge from the avatar.
Which brings this back to financial planning selling season. Pay attention to the language in the pitch ads you hear. How are banks and wealth management companies and the like positioning their message? How are they speaking to you? What age cohorts are they targeting and how well do you think the messaging is resonating to each of these?
Then as you are listening to those seasonal ads ringing in your ears, you might wonder what would nudge you to take a practical, proactive look at planning financially for your later years. When is that any way?
Maybe you should ask your avatar before you call your financial planner.