Two things happened this week that made me realize the importance of quality time.
The first was when waiting in a long queue for a rollercoaster at a recently reopened theme park. Standing in a queue is not my idea of quality time, and I wondered how much I would pay for a ticket to jump to the front of the queue if such an option were available.
The second was an ill-fated attempt to replace the water softener resin in our house. Needless to say, after trying to fix it myself, I immediately booked the water softener engineer. The time spent in a failed attempt to change the resin and the unnecessary stress it caused was certainly not quality time. Paying for an expert to solve the issue was well worth it.
Following these two events, we had a family meeting with the objective of putting explicit value on our time. For future tasks, we decided to hire help or pay a premium if the increase in quality time would outweigh the costs.
Of course, by outsourcing tasks, I am placing my trust in someone else, so I need to research by doing things like asking my friends for recommendations.
Retirement planning is not something to undertake lightly. One key decision is whether to adopt a DIY approach or work with an adviser.
I believe an individual can plan and execute a successful retirement with sufficient time, knowledge, confidence, and enthusiasm. However, someone who has decided to contact an adviser may feel they lack one or more of those attributes and would instead partner with a professional. A vital part of the discovery meeting is to explore these perceived shortfalls and any that may have been overlooked to see if I can add value to their situation.
For most people, DIY retirement planning is not considered quality time. Some feel they might enjoy it, but it is vital for them to understand whether this enthusiasm would continue into their retirement or would instead become a chore. Might they develop new hobbies that mean there is not as much free time in retirement as they had expected?
Continually evolving taxation legislation, developments in the retirement planning space, and changes to risk appetites are just some of the many things the DIY retiree would need to consider. With the amount of information available, it’s hard to parse out what is valuable. Furthermore, there is always the risk of unknowns. If a retiree has focused on specific funds rather than having a basic financial plan, their retirement may not be sustainable.
It is a sad fact of aging that our mental faculties start to decline. One source estimates peak financial literacy occurs at age 49 and starts to decline by around 1.5% a year after the age of 60. What may seem manageable now may not be a decade or so into the future.
You can also explain to prospects that they risk leaving their partner with little knowledge of the retirement plan and what they should do next if they pass away. I recently took on a client with a background in risk management, and they emphasized one of their primary objectives when choosing to work with me was making sure their partner wouldn’t be left in the lurch if the client were no longer around.
Some other things that I may explore with the client who was on the fence about DIY would include confidence in their planned withdrawal rate should there be a market crash. Would they be tempted to sell their investments and wait until the market recovers? How would they feel during volatile markets if they did not have a professional to guide and reassure them?
My job during the discovery meeting isn’t to persuade the client to engage with me but to inform them of the benefits of working with a retirement planning specialist.
How much do they value quality time? We help them preserve it while giving them the best chance of a successful retirement outcome.
The views expressed in this article are those of the author and do not necessarily reflect those of Voyant.