March 26, 2006
Neal St. Anthony
Because money can't buy happiness, retirement planning must go beyond the numbers.
Ebenezer Scrooge, the long-toothed miser in the "Christmas Carol," taught us that being old and rich doesn't necessarily mean being happy.
"Scrooge had lots of money, but he wasn't happy until he had a purpose in his life, helping others," recalled Craig Brimhall, vice president of retirement wealth strategies at Ameriprise Financial Inc., the Minneapolis-based financial planning and investments firm. "Money isn't the only answer to retirement. Purpose and vision are equally important."
Most personal finance columns are filled with the importance of savings; how to get yourself through your 70s and 80s, mutual fund returns and fees and asset allocation. And most financial counselors are charged by their clients and companies with making sure their clients are serious about setting enough aside and focused on maximizing returns with their college-fund and investment nest eggs.
Yet a new survey of Americans aged 40 to 75 commissioned by Ameriprise indicates that planning how to invest your time in retirement ranks on par with having enough money.
The survey of 2,000 people was taken late last year by Harris Interactive.
Baby boomers, who start to turn 60 this year, are aware of the financial challenges ahead.
Maddy Dychtwald, a baby boomer and founder of Age Wave, a firm that tracks baby boomers and helps companies develop related products and services, told several hundred Ameriprise financial advisers at a training session last week that retirement expectations and reality involve "distinct emotional stages."
As a result of the survey and scores of interviews with clients and advisers, Ameriprise devised "The Dream Book: Planning Beyond the Numbers," a guide designed to help clients document their hopes for retirement, plans for financing health care and ways to stay physically and mentally alert, community service, as well as dream vacations.
"The Dream Book," which is being introduced to Ameriprise's 10,000-plus financial advisers in seminars around the country this spring, is designed to help avoid the emotional roller coaster of retirement that the survey hinted at and to help people focus on what's important, as well as how to finance it.
"One insight from the survey was that some of the most successful retirees were also the ones who had done financial planning along the way," Ameriprise CEO Jim Cracchiolo said.
The survey determined that:
• About two-thirds of respondents who are five to 15 years from planned retirement had high expectations for happiness and adventure; it's what the authors called the "imagination stage." But only about 44 percent said they are "on track" in terms of financial and other preparation.
• About 80 percent said that within five years of retirement they're excited about their future freedom. But that number starts to decline within two years as some fret about financial uncertainty and the loss of work-related relationships.
• About 80 percent of folks are "liberated" when they leave the job, but that number soon declines as realities set in.
• Within two years after retirement, about one-third to one-half of all retirees complain of emptiness, worry and boredom.
• After 15 years, the number of unhappy people starts to decline as people reconcile themselves to their lot.
The lesson is that the happiest, healthiest retirees were not necessarily the folks with the most money and biggest collections of golf clubs.
The happiest did some financial planning. Some worked because they had to, or -- like a 70-year-old, part-time bagger at a supermarket I know -- because they wanted to connect with folks, make a bit of money and get out of the apartment.
Work also gives us a sense of belonging and being needed, even though we might love to grouse about the job.
Similarly, some of the happiest retirees immerse themselves in hobbies, from car repair to community education classes, to travel and as volunteers at the neighborhood school or for others who need their assistance.
In the movie "City Slickers," comedian Billy Crystal told a bored group of grade-school kids that growing old basically involved spending your 70s walking around shopping malls, looking dumb, trying to find the softest yogurt, and your 80s in a nursing home in a fog, falling for a nurses aide whom your wife doesn't like but whom you refer to as "Mama."
To avoid missing out on what can be some productive as well as fun and important years, planning for an active, interesting retirement can be as important as financing one.
More information on the survey and a copy of "The Dream Book" are at available at www.ameriprise.com. Put "dream book" in the search window.
Neal St. Anthony • 612-673-7144
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