Life After Full-time Work Blog

Here are the reactions I remember, following my talk that made the case for education for Life Two

My speech [http://donezra.com/61-readiness-for-life-after-full-time-work/ ] was part of a one-hour slot.  It took less than half an hour, even with the introduction of me as the speaker.  That left a lot of time for the audience reaction. We filled it.  Of course I was involved in the whole back-and-forth, so I couldn’t stop to make notes.  But I tried to remember and write down some of the discussion later.  At the end of the day I added further notes, because there were further conversations as people approached me to talk about the subject.

These are just anecdotes and personal feelings, of course.  They prove nothing. 

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My overall feeling was one of delight, for three reasons.

One was that the subject clearly resonated.  Many people told me that they had absorbed what I said as individuals facing these issues, much more than wearing their employment hats.  And they found something that I said triggered deeply personal thoughts.  Some actually shared with me the thoughts, about themselves and their families, that had assumed a new and immediate importance.  I can’t, of course, share them with you: they were obviously said confidentially.  But it’s gratifying to know you’ve touched someone.

The second was that I had expected employers to say something like: Good idea, but not for us – that’s not the sort of thing we do.  I was wrong. Or at least, based on those who approached me (I have no way of knowing what the others thought), there are many for whom the psychological and financial well-being of their plan participants are important to them. More on this later.

The third was that the expression Life Two also clearly resonated.  Through the whole of the next session, and in fact the rest of the conference, Life Two became an accepted way of referring to the time of retirement.  I must tell my publisher – in a conversation with him before I left for the conference he had told me that it was a great title for the book.  (None of that “Freedom, Time, Happiness” stuff that I had fancifully imagined!)

Oh, I suppose there’s a fourth reason, one that encouraged me even while I was speaking.  I saw many in the audience taking notes!  Yes, the old-fashioned way, pen on paper, so I knew it wasn’t just them being distracted online on their smartphones.

In no particular order, here are some of my notes.

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Lots of “thanks” – “this is really needed” – two angles in particular were repeated.

One was what to do with your time.  That seemed to resonate.  In fact one person asked me to repeat Ernie Zelinski’s name – I’m guessing I added a sale of his book there (How to Retire Happy, Wild and Free: Retirement Wisdom That You Won’t Get from Your Financial Adviser).

The other was that I mentioned the notion of investment safety.  I was told that this is very important to most people, particularly to non-investment-oriented people.  Standard deviation and volatility are for geeks, not for the average worker.  In fact that opens a new avenue for me.  I have a decumulation approach that invokes safety and growth explicitly.  I wasn’t planning to make it part of the Walking Tour, but now I think perhaps I should.  The challenge, of course, is how to do it in a way that’s understandable, because some of the background is technical.  But hey, what’s life without a challenge?

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My talk was focused on workers in the twenty years before retirement.  What about younger people?  Shouldn’t we start earlier, when there’s more time to avoid the financial problems?  Answer: Yes, definitely.  I picked the over-50s simply because I wanted to start narrowly rather than solving the whole world’s problems.  But also because I think there are a couple of books that already do the job well, and I mentioned them explicitly.  One is William Bernstein’s If You Can, a very short and simple book (free digitally for US purchasers from Amazon, I believe), aimed specifically at Millennials. The other is by Jonathan Clements, From Here to Financial Happiness: Enrich Your Life in Just 77 Days.  It has the same sort of structure I’m planning, some straightforward learning followed by exercises to apply the learning to yourself.  I have no connection with either author – I’m simply an admirer of both.  And their books relieve me of the need to create something, other than for the over-50s, for whom financial publications abound in an American context, but not necessarily a set of principles that apply globally, and not just to financial but also to the psychological and practical issues mentioned.

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There’s a topic that’s a big one in the retirement industry, and it goes by the jargon name of “to versus through.”  In this phrase, “to” refers to helping workers up to retirement, and “through” refers to helping them all the way through, past their retirement and into Life Two.  I was asked for my views on the subject: do I think help should be provided only to retirement, or all the way through retirement?   Easy. Only “through” matters.  “To” is used when plan sponsors want nothing more to do with those who have retired.  Often this is for legal reasons, as they may fear the possible exposure to lawsuits from those who no longer work for them.   But for an individual, life goes on, not just to retirement but into Life Two, and the need for guidance doesn’t stop at retirement.

Several angles arise from that thought.

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Do employers want to work with retirees?  In a subsequent session, one of the notions advanced was that the proportion of retirees staying in the plan should be one of the measures of the plan’s success.  And in a different session: how you treat employees is one of the top 5 ways consumers rate corporations.  (I hadn’t come across that one before.)  From conversations afterwards, and from the Excellence and Innovation Awards given out (sponsored by P&I and DCIIA), it was clear that there really are employers who want to help their workers as much as they can (short of actually giving specific advice), and some have education sessions too. More on this later.

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Any thoughts on the transition from Life One to Life Two?  It’s not necessarily a smooth one, so shouldn’t we prepare people for it?  Yes indeed, so glad you raised this very important angle.  It’s relevant for everyone, and I experienced it myself, so I know how big a surprise it can be. I related my own story [http://donezra.com/59-transitioning-away-from-full-time-work/ ].  (I was told afterwards that the uprooted tree analogy was a powerful one.)  My planned Walking Tour has more than one stage devoted to transition.

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Life Two is the happiest time of life – expand on that, please.  Yes indeed, thanks for mentioning it!  I explained the U-curve of happiness, showing that we tend to be happiest in our later years [http://donezra.com/theres-a-connection-between-happiness-and-age/ ].  Mind you, that has nothing to do with retirement itself: our brains are built to operate that way.  But surely retirement should take advantage of that, rather than building fear into it. It’s like the medical profession’s dictum: first, do no harm.  My Walking Tour starts by telling a prospective retiree that, far from being terrifying, Life Two is naturally built to be the best time of life [http://donezra.com/55-raise-a-glass-to-the-peak-time-of-life/ ]. Accentuate the positive, eliminate the negative, as the old song said.

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What about those with very low assets, barely above the breadline?  What solution do I have for them?  Very sad, I said.  Quite simply, I have no solution, no silver bullet, no magic wand.  They’ll have to rely on social welfare payments, which typically continue for life, though at a low level.  There’s also another group for whom this sort of education, at least the financial angle, won’t be of much value: those who have enough money that they can certainly live their desired lifestyles for as long as they live.  They may have other financial issues, like bequests, but retirement finance isn’t among them.  Even eliminating those at both ends of the wealth spectrum, I’m guessing the vast majority of employees would find great value in education for Life Two.

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Is there a natural community for providing this education?  I don’t know.  Governments tend to be followers of private initiatives, not leaders: think of education for Life One, and the fact that even in 1900 a quarter of the states didn’t automatically provide it.  For Life Two, we know some employers provide education, though it tends to be mostly financial and mostly explaining the specifics of their own plan, for a half-day or a day, typically.  Industry associations, perhaps?  What communities do retirees feel they belong to?  Unions?  Churches? Might one provider be community colleges with adult education?  I don’t know. I’d love to see something start – anywhere – and see how it goes.

What sort of education works?  I don’t know. All I can think of is: here are some ideas (as I’ve explained them today, and they’ll eventually be on the website); try them out and see what works, discard or improve what doesn’t. Ultimately there’s only one test: do people use it and benefit from it?  (A reminder, to me as much as to any teacher: simplicity is a key ingredient.)

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Speaking of the website, there were a couple of complimentary references.  One was that 10-30-60 [http://donezra.com/18-the-10-30-60-rule-shows-the-huge-multiplier-effect-of-investing/ ] was a revelation. The other was that the Personal Funded Ratio calculator [http://donezra.com/personal-funded-ratio-calculator-introduction/ ] works great.  Thank you!  (Note to myself: I have the impression that those who have mastered the PFR, love it. But it’s too complex for the average person.  In the Walking Tour it needs to be made simpler.)

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A final note.  At the conference, the Employee Benefit Research Institute presented its annual Lillywhite Award (“for extraordinary lifetime contributions to Americans’ economic security”)  to Karin Brodbeck, just retired from Nestlé, for her leadership in bringing innovation to her plan’s members and sharing those ideas with the world.  I was doubly thrilled to be present, as I used to work at EBRI with their new CEO Lori Lucas when we both served on its Research Committee, and I worked with Karin when I was at Russell.  (She remembered the year we met: 1993.) Karin was nice enough to actually mention me in her remarks: wow, talk about heart swelling with pride!

It was a great conference for me, partly for the content (which I have barely touched on in this Post), and partly, as you can tell, for emotional reasons. And I have now also received an informal invitation to address, next May, an important group charged with the responsibility to educate their beneficiaries about retirement – their President had heard immediately all kinds of good things about my talk and the way it was received, and got in touch with me right away.

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Takeaway

The need for education for Life Two seemed to resonate, particularly when people thought about themselves on life’s journey.

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An Update on Recent Readers’ Comments

I know some of you like a reminder of recent comments by readers.  Since we re-started the blog posts in September, there have been readers’ comments posted on #55, 57, 58, 59 and 61.  Enjoy!

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