The Long View: Dan Haylett - 'The Retirement You Didn't See Coming'

Key Concepts

• The Human Side of Retirement: The emotional, psychological, and social aspects of transitioning into retirement, often overlooked in favor of financial planning.
• Retirement as a "Summit" or "Finish Line": The misconception of retirement as a singular goal to be reached, rather than a new phase of life requiring planning and adaptation.
• The "No View" Phenomenon: The sense of disappointment or disorientation experienced by retirees who achieve their financial goals but lack purpose or direction.
• Modern Retiree vs. Traditional Retiree: The distinct challenges faced by knowledge workers in retirement compared to those in manual labor, particularly regarding identity and purpose.
• Leisure vs. Purposeful Activity: The distinction between passive leisure and engaging, purposeful activities that contribute to fulfillment in retirement.
• Anchors and Rhythm: Establishing routines and predictable activities to provide structure and meaning in retirement.
• The "No Yay" Effect: The psychological benefit of saying "no" to non-essential commitments to free up time and energy for what truly matters.
• Beginner's Mindset and Growth Mindset: Approaching retirement with openness to learning, trying new things, and accepting potential failures.
• Phased Retirement: A gradual transition into retirement, allowing for adaptation and retention of some work-related elements.
• The Five Pillars of a Thriving Retirement: Purpose, identity, relationships, structure, and well-being.
• Loss of Identity: The challenge of redefining oneself outside of a professional role, especially for high-status professionals.
• Two-Way Mentoring: Reciprocal learning and knowledge exchange between different age groups.
• Relationship Dynamics in Retirement: The impact of increased togetherness on couples and the importance of individual and shared pursuits.
• Family Obligations: The potential for caregiving responsibilities to fill the void of retirement and impact personal plans.
• Permission to Spend: The psychological barrier to spending accumulated savings and the need to grant oneself permission to enjoy the fruits of labor.
• Intrinsic vs. Extrinsic Joy: Differentiating between spending that provides deep, personal satisfaction versus spending driven by external validation.
• Designing a Life, Not Just a Retirement: The concept of building a fulfilling life that one doesn't need to "retire from."

The Human Side of Retirement: Beyond the Numbers

Dan Hlet, author of "The Retirement You Didn't See Coming," emphasizes that the human element of retirement planning is often more critical than the financial figures. His early experiences with clients revealed that even with robust financial plans, retirees could experience significant emotional distress, including a sense of letdown, loss of purpose, identity crisis, and relationship strain. This realization shifted his focus to the behavioral and emotional aspects of this life transition.

The "No View" Phenomenon: The Disappointment of Reaching the Summit

Hlet likens the experience of retirement to climbing Mount Everest and reaching the summit only to find "no view," altitude sickness, and disorientation. This "no view" phenomenon stems from several factors:

• The Thrill of the Chase: The pursuit of a goal can be more engaging than its attainment.
• Retirement as a Finish Line: Many individuals view retirement as the ultimate end goal, sacrificing heavily to reach it without adequately planning for what comes next.
• Focus on Numbers Over Purpose: An overemphasis on saving and hitting a financial target leaves little energy for contemplating life after work.
• Loss of Purpose and Identity: For knowledge workers, retirement can mean losing a significant source of identity, purpose, and structure that work provided. This is a stark contrast to manual laborers who may welcome relief from physical strain.
• Disorientation: The sudden absence of daily structure and the need to redefine one's role can be profoundly disorienting.

Navigating the Retirement Landscape: Avoiding the Pitfalls

Hlet outlines common mistakes and offers strategies for a more fulfilling retirement:

The Pitfalls of Leisure and Over-Scheduling

• The Leisure Trap: While enjoyable in moderation, constant leisure can lose its appeal. Hlet uses the example of golfers who, after an initial period of enjoyment, can become bored with playing the same sport daily. The "retirement honeymoon phase" of constant vacation and leisure must eventually transition to a more sustainable rhythm.
• The Over-Scheduled Retiree: Some retirees, accustomed to productivity equating to success in their careers, fill their calendars with numerous obligations, leading to burnout and a lack of genuine joy. This "busy-ness" can be a hang-up from the corporate world.

Finding Balance: Anchors, Rhythm, and Saying No

• Anchors and Rhythm: Establishing anchors (e.g., a specific activity on a Monday morning) and a rhythm provides structure and predictability.
• Comfort in Silence and Reflection: It's crucial to be comfortable with downtime, reading, listening to podcasts, or simply being present without the need for constant activity.
• The Power of "No": Learning to say "no" to non-essential commitments is vital. Hlet advocates for the "no yay" effect, where declining an invitation brings a sense of relief and validates the decision, freeing up time for more meaningful pursuits.

The First Year of Retirement: A Time for Exploration

• Yes and No to the First Year: While downtime is essential, the first year should also be an opportunity for exploration.
• Beginner's and Growth Mindset: Approaching this phase with a willingness to try new things, embrace being a beginner, and not fear failure is key. This can involve trying multiple hobbies or activities to discover what resonates.
• Humility in Learning: For successful individuals, returning to a beginner's state can be challenging but is crucial for finding joy and fulfillment.

Phased Retirement: A Smoother Transition

Hlet strongly advocates for phased retirement as a means to mitigate the abrupt loss associated with a hard stop.

• Mitigating Loss: Work often provides purpose, identity, relationships, structure, and well-being. A hard stop can lead to rapid loss in these areas, akin to grief.
• Retaining Key Elements: Phased retirement allows individuals to identify and retain the aspects of work they enjoy, reduce hours, or take on less responsibility while still contributing meaningfully.
• Leveraging Peak Wisdom: This approach is particularly beneficial for knowledge workers who possess significant wisdom and experience in their 50s and 60s, allowing them to mentor others and stay engaged.

Redefining Identity Beyond the Job Title

A significant challenge in retirement is the loss of identity tied to a professional role.

• Beyond the Title: Hlet suggests creating a more comprehensive identity statement, perhaps a paragraph or bullet points, that goes beyond a job title. This can involve identifying oneself as a "mentor," "advisor," or "community builder."
• Tangible Identity: Designing a personal business card with this new identity can be a powerful tool for self-definition and communication.
• Mentoring and Giving Back: Leveraging skills and wisdom through mentoring programs or consultancy work can provide a continued sense of purpose and identity.

The Importance of Diverse Relationships

Hlet emphasizes the value of maintaining relationships with people of different ages and backgrounds.

• Avoiding Age-Related Grief: Having friends of various ages can help mitigate the sense of loss as peers age and pass away.
• Broader Perspectives: Engaging with different demographics provides new viewpoints and keeps one feeling younger and more connected to the world.
• Two-Way Mentoring: This reciprocal learning between generations is highly beneficial, challenging stereotypes and fostering mutual understanding.

Relationships in Retirement: Navigating Togetherness

Retirement significantly alters the dynamics of couples' relationships.

• Open Communication is Key: Couples often haven't had deep conversations about their retirement aspirations. Any question is a good starting point.
• Individual and Shared Plans: Hlet recommends a "my plan, your plan, our plan" approach, using Venn diagrams to identify individual desires and shared goals.
• Respecting Space and Individuality: It's crucial to acknowledge that partners may have different aspirations and to respect each other's need for individual time and activities. The COVID-19 lockdown served as an unintentional litmus test for couples' ability to coexist and respect each other's space.
• Avoiding 24/7 Togetherness: Constant togetherness can diminish the impact of leisure and holidays. Maintaining separate interests and friendships keeps the relationship energized.
• Timing of Retirement: Retiring simultaneously can be overwhelming. Hlet advises against sacrificing individual timelines for the sake of retiring together, as it can lead to resentment or regret.

Managing Family Obligations

Retirement can lead to increased family responsibilities, such as caring for elderly parents or grandchildren.

• Setting Boundaries Early: It's essential to have conversations with children and parents about expectations and boundaries before retirement.
• The "No" to Family: Saying "no" to family obligations can be difficult but is necessary to protect personal time and plans.
• Impact on Personal Goals: Overcommitment to family care can derail personal aspirations, including travel and leisure.
• Proactive Planning for Eldercare: Individuals should consider provisions for eldercare to avoid becoming the sole caregivers.

Financial Mistakes in Retirement Planning

While the focus is on the human side, financial missteps can still occur.

• Lack of Life Vision and Costing: Many pre-retirees and retirees lack a clear understanding of the life they want to lead and its associated costs.
• Arbitrary Savings Goals: Following generic advice (e.g., needing a million dollars) without personalizing it can lead to oversaving.
• Oversaving Leading to Underspending: Ironically, saving too much can create a psychological barrier to spending, leading to an underspending problem.

Permission to Spend: Releasing the Savings

A significant hurdle is the psychological difficulty of spending accumulated wealth.

• The "Permission Problem": It takes courage to spend money saved over decades, which provided security, status, and identity.
• Permission Slips: Hlet suggests writing down "I give myself permission to spend money on..." to consciously grant oneself the ability to enjoy savings.
• Intrinsic Joy as a Guide: Spending should be guided by what brings genuine, intrinsic joy, not by external validation or social media trends. This focus often leads to realizing that less spending is needed than initially perceived.
• Spending While Working: Hlet encourages clients to take nice trips or engage in meaningful experiences while still working, rather than waiting for retirement, as timing and life stages are crucial.

Designing a Life, Not Just a Retirement

The concept of "retirement" itself is problematic, often associated with an end or a sacrifice.

• Living Fully Now: Hlet advocates for living life to its fullest earlier, when money, time, and health are aligned.
• Designing a Life You Don't Want to Retire From: The goal is to create a life with purpose and passion that transcends the need for a traditional retirement.
• Transition, Not an End: Retirement should be viewed as a transition into a different way of life with evolving relationships and responsibilities, rather than a definitive end date.
• Personal Evolution: Hlet's own perspective has shifted towards creating a life with purpose and passion that he can continue indefinitely, moving away from the idea of a monetary retirement goal.

Disclosure: The views and opinions expressed in this podcast are those of the guests and do not necessarily reflect the views of Morningstar, Inc. and its affiliates. This recording is for informational purposes only and should not be considered investment or tax advice.