By Lewis J. Walker, CFP®
Retirement planning is a “multi-generational” exercise. As a current state
or planned for in the future, “retirement” commands increased attention from
three or four generations, a phenomenon unique in the history of mankind given
increases in longevity.
Here’s a shocker for those not watching demographic trends. The last of
the Baby Boomers, those born between 1946-1964, turn 50 this year. That means
the leading edge of Generation X, born 1965-1978, will hit the Big 5-oh! next
year—as AARP solicitations emphasize that time is racing by.
Meantime, members of the Silent Generation, generally those born
between 1925 and 1945 who experienced WWII and the impact of the Great
Depression in childhood, range in age between 69 and 89. Their children and
grandchildren are watching those ahead of them as a vision of the future. Real
time experiences of people dealing with aging loved ones are shaping attitudes
and planning and investment behaviors of those coming up behind.
The oldest of the Millennial Generation, Gen Y, 1979-1996, turn 35 in
2014. They dream of travel, hobbies, work/life balance, the pursuit of meaning
and making a difference, ambitions colliding at times with career, job, marital,
parental, and debt payment realities.
References are made to the “sandwich generation” squeeze. It may be
more of a “club sandwich,” involving three or four generations. While managing
their own career, financial, and health challenges, many boomers in their 40s and
50s are dealing with aging parents and their financial and health difficulties. In
some cases grown children present challenges to parents. Career, job, and marital
difficulties, destructive habits and dependencies, and special needs can drain
parental emotions and finances.
This suggests, given life spans and multi-generational challenges, a need
for deep, realistic, and yes, at times difficult and emotional discussions between
generations. Often it takes a crisis to reveal a lack of planning and readiness. That
may spur conversations and conflict at a time of stress and perhaps, loss. Since a
response to crisis or difficulty often involves money, financial advisors have a role
and a fiduciary duty to further and potentially guide conversations with family
members. For some in financial services this is new and uncomfortable territory.
The study of life transitions planning is increasing among leading financial
planners. In tandem with the Age Wave, more experienced planners are living
through generational challenges themselves.
Teams of allied professionals are forming to resource myriad alternatives
germane to challenges—death, dying, grieving; end-of-life planning; loss of a
spouse or other loved one; divorce after a long marriage; succession planning
for business owners and professionals; tax, estate, and legacy planning; trust
planning to deal with special needs offspring, spouses, or parents; remarriage
and blended families; job loss and career changes; forced early retirement; family
Challenges may have positive attributes such as the pursuit of meaning
and purpose, before and after retirement, also a focus of financial planners
and allied team members. All challenges, positive and negative, require
conversations, appreciative inquiry, fact finding beyond surface observations,
and multi-dimensional solutions. For every challenge, there is an alternative,
and finding the best alternative is an outcome of analysis and applied wisdom.
Optimal alternatives require resources, and most likely, that means money.
Hence increased focus on not outliving one’s money in retirement, which
requires an assessment of risks. Take health care expenses, looming large as a
multi-generational concern. Providing for long term care and other health costs
has financial implications that impact lifestyle and dream actualization along
with investment policy and insurance decisions for both parents and offspring.
Resources often include family and community involvement. Caregiving, either
providing it or arranging for it, often falls on female members of the family. Have
probabilities and key issues been addressed? Is there a plan? Does it all fall on
one person or is there a family team?
Once you address challenges, alternatives, and resources, have
expectations, the outcome desired, been defined? More people are living to age
100, making 50 a century midpoint “wake-up-call.” Relative to the Age Wave, are
you just going with the flow? Or do you have a comprehensive surfing strategy?
Lewis Walker is President of Walker Capital Management, LLC. Certain advisory services offered through The Strategic Financial
Alliance, Inc. (SFA). Lewis Walker is a registered representative of SFA which is otherwise unaffiliated with Walker Capital
Management, LLC. firstname.lastname@example.org