Retirement planning must go beyond finances

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For many Canadians entering their golden years, retirement brings up visions of a simple time filled with leisurely activities, relaxing trips and lounging about. But for many retirees, living that life turns out to be much different.

Harvard Business School professor Teresa Amabile, who studies identity and retirement, has found that many people face an “existential crisis” upon retiring, finding the novelty of not working wears off quickly while they struggle to maintain a strong sense of identity when they’re no longer tethered to an occupation.

“We’ve done our society bit of a disservice by painting our retirement as sort of the golden years, the best time of your life. And people have been wrapped up in that notion – that they can look forward to this freedom, sailing off into the sunset holding hands,” says Susan Latremoille, director, wealth management and wealth advisor with the Latremoille Begg Group at Richardson GMP Ltd. in Toronto. “But the reality is that it doesn’t always work out that way”

Ms. Latremoille, like many financial advisors in Canada, helps her clients avoid this post-career slump through holistic retirement planning that goes beyond the financial aspects. But some say it can be difficult to venture into these conversations with clients who are hesitant to reveal details of their personal lives – especially if they perceive their advisor to be there solely to look after their financial well-being.

“Not every client would expect that [from] their advisor,” Ms. Latremoille says. “I’ve always been the type of advisor who wants the big picture. I want to know all about the family, their travels, hobbies and interests. It’s about discovering what clients’ real interests and passions are and then helping them connect with that.”

Ronald Harvey, senior financial advisor with the Harvey Waterman Team at IPC Investment Corp. in Ottawa, believes some clients may be hesitant to discuss the personal aspects of retired life because they fear not being able to afford their goals. For these clients, planning a fulfilling retirement is hardly a priority when they’re worried about being able to afford to retire at all.

“What keeps them from from their passions and stuff, I think is a fear of failure,” Mr. Harvey says. “What if it doesn’t work? ... [It all comes] back to the [question], ‘Can I afford to retire?’”

Although some clients may not take well to formal discussion of post-retirement life goals, Mr. Harvey says he tries to incorporate casual discussion of clients’ personal lives into every meeting. By asking questions such as, “What’s different in your life since the last time we met?” he’s able to pick up on a clients’ interests, goals and values without asking them about their retirement plans directly – a request he says is often met with a “deer in the headlights look.”

Wayne Ricard, branch manager and financial planning advisor at Assante Financial Management Ltd. in Whitby, Ont., says he discusses clients’ financial goals in the context of their personal ones from the very first meeting.

“I ask clients what they’re looking for – and then, you hopefully can help extract the right answers. The wrong answer is, ‘I’m looking for somebody that can get me better [financial] performance,’” he says. “We can’t control the market, so I’m more interested in talking about the things we can control, such as, ‘When do you want to retire? What does retirement look like for you?’”

Adds Mr. Ricard: “I’m the observer who says, ‘Okay, well, this is where you want to go. And this is what we need to do [to get you there].’”

For clients who are more open to discussing their personal lives, Ms. Latremoille takes a rather structured approach to setting retirement goals. She advocates for establishing a “diversified portfolio” of retirement activities as a way to prevent one scenario she commonly sees among retirees: planning to engage in one activity for the duration of their retirement, only to quickly burn out from it soon after they retire.

“In that portfolio, you have personal goals, you may have family responsibilities, or family goals that you want to do, you may want to travel … learn new skills, take up a new hobby,” she says. “There are all sorts of parts of a retirement portfolio that can be very satisfying as long as they’re in balance with each other – so that you’re not travelling all the time or you’re not trying to learn French all the time.”

Ms. Latremoille also tries to help clients differentiate between “hollow goals” and deeper ones. She points to an example of a client who “couldn’t wait to retire and spend all day on the golf course” – only to grow bored of it quickly.

“What he thought was going to be his big life purpose and goal, which was spending the winter in Florida and play golf, turned out to be a pretty hollow goal for him,” she says. “And so, it took them a while to sort of readjust and figure out what else he is going to do.”

Although she admits that “one man’s definition of hollow is another man’s fulfillment,” helping clients engage in a wide range of activities – some purpose-driven and some enjoyment-driven – is essential to warding off burnout in retirement.

Mr. Harvey takes a similar approach to coaching clients through retirement planning, adding that he encourages many to continue exercising their existing skill sets even after their career ends, taking on part-time work, volunteering, teaching at community centres, writing or pursuing other passion projects.

“I remind them, ‘Your skill set doesn’t go off like a light switch when you leave work. Look at it more like a dimmer switch. You’re still as capable of doing what you did the day after you retire than you were the day before,’” he says.