Transition Anxiety and the Emotional Roller Coaster of Retirement

If you could have a candid conversation with financial advisors who have decades of experience helping professionals, business owners, and families just like yours plan for their financial future, what questions would you ask? I'm Chip Munn, financial advisor, author, host, and CEO of Signature Wealth Group. For decades, my partners and advisory teams have had the opportunity to answer the tough questions for hundreds of our clients. Now we want to do the same for you. On the Signature Life Show, you'll hear answers to your burning and most perplexing finance, investing, and retirement questions from our Chief Investment Officer, Senior Wealth Advisors, Certified Financial Planners, and more. We aren't just financial advisors. We're parents, children, community leaders, and entrepreneurs with a passion for helping empower our clients to live life intentionally, what we call a Signature Life. John Tate, what's up, man?

Chip Munn, it is a fabulous day because we get to do this show.

I'm excited and probably more excited at least than our first couple of shows because today we're joined by a good friend of ours, Zach Hearn, with Signature Welts in Greenville. Zach, welcome to the show.

Thank you, I appreciate you guys having me.

Absolutely. One of the things that is important to us in putting together the material for this show is to be able to use it as a way to talk about things that are important to real-life clients. It's not just about education and research for us. It's more about being able to have and share real-world conversations about things that are important to clients. And so, John, over the last couple of weeks, we've talked a little bit about the Signature Life and why we put this show together and really why we do some of the planning that we do. And before we get into today's topic, give us a little bit of a rundown on the things that we've talked about for anybody who hasn't listened to the last couple of weeks.

Well, if we go back to the name of the show, it's the Signature Life Show, right? And the Signature Life is something that Chip Munn created, actually, our wonderful host created, as a way to describe the types of strategies and planning that we incorporate into what we do with our clients. And so that's what the first couple of episodes have been about is how we go about that process. What do we do? What do we expect the outcome to be? How do we expect it to benefit our clients? Not only in the immediate present, which we would all like immediate satisfaction from what we're doing today, but that doesn't always happen. So sometimes we have to look at what we expect the intermediate outcome and the long-term outcome to be. And that's a little bit different for all of our clients. I can say that without error, because everybody's different.. And I just know that whatever I'm doing for one person is not going to be the same for the other, right, Chip?

Yeah, absolutely. Of course, the company name Signature came from the idea that everybody's unique and different and that we want to reflect in what we do and who we are that truism. But while that is definitely true, that everybody in their life and their goals and things like that are different, there are also a lot of commonalities. And one of the things that we've seen, particularly over the last month or so, is we've seen a lot of just uncertainty. And one of the things that most people want when it comes to the idea of their financial life is, you know, certainty is a big thing. And, and of course, there are no guarantees in investments or in life, but over the last month or so, we've seen tons of things that folks can be uncertain about, whether it is interest rates or the economy in general, global politics, commodity prices. There, there have just been tons of things that people can be anxious about just right now in this moment. But the fact is that those are just the current things. There are also lots of anxieties that we have that aren't specific to any point in time. They're more specific maybe to stages that we go through. And Zach, one of the things that you had brought to John and I was the idea of the amount of anxiety sometimes that people go through when they're going through transitions. What are some of the things that when you talk to clients that you've seen lately that are bringing about kind of new, or new to them, anxiety?

Yeah, I think if we've learned anything over the last 2 years, it's that things can change. They can always change, and they can change quickly. And so conversations that I've had with clients, obviously with everything that's happened in the market the last 2 years, there's some anxiety with that. But aside from the financial piece of it, a lot of the clients that I work with have just recently entered into retirement. And I think there's obviously a large emphasis placed on the financial aspect of retirement. Do I have enough? When do I do it? The timing of it., but you don't typically think a lot about the emotional aspect of what's my day-to-day life going to be? Who am I now that I'm not going to this job? Because for most folks, you know, 40+ years you spent clocking in, giving your time, your knowledge, providing a service, and getting a paycheck for that. And I think it's easy for a lot of folks to associate their value to society or just internally with themselves with that paycheck that they got over time. And so now as you transition into life where that's kind of not how you're shown or being shown value emotionally, it's a big adjustment and that's not something that I think most clients think about prior to that transition.

I think you're absolutely right. I think, John, that in our kind of show notes, you called it transition anxiety, and I have certainly seen it many times in terms of any time that you're going through a major shift in your life, particularly those, frankly, that deal with your finances. You just don't know what you don't know. And so sometimes I think that can add a layer of complexity and concern that otherwise, or prior to, you didn't have. John, what do you think about that?

When you meet somebody for the first time and you want to get to know them, I mean, what are the questions you ask? One of the first questions you ask might be, what do you do for a living? It's so easy for somebody to, over time, to identify their value and their job as the same thing because it's just something we talk about Even when we meet somebody for the first time, maybe. And so getting people around that, trying to help them figure out before the actual date of retirement happens, if it's like that, it's not like that for everybody, but it's our job to try and help them figure out how to replace that identity with something else. So maybe slowly over time, they start to identify with the work they do through a charity or the fun that they have with friends on the golf course. Maybe they're running the golf club, the group of guys that go out every Wednesday and play 18 holes, whatever that is. Maybe they find different things to do so that when they meet somebody and somebody says, well, hey, what do you do? Or how do you spend your time? Whatever the question is, they then have some other things to say other than nothing. I just sat at home today and watched E.T. You never know what the answer might be. But I feel like it's our job to kind of help them along that transition. And if we can do that, then some of these other anxieties might not take such a hard path to the forefront of their mind. They might not worry about it as much. They might not worry about running out of money or not worry about whether their investments are doing well, watching the market on a daily basis, whatever it is. Give them something else to do and to focus on. It's our job, right?

Right. And I think that if you've ever been on a break from work. So if we think about things that we have experienced, if you've ever been on a break from work that wasn't necessarily a vacation, it is very easy for some people to get bored. And so all of a sudden you start thinking about, or if you're alone with your thoughts too long, you start thinking about or even worrying about things that normally when you're working you'd have been distracted from. I mean, you're at work all day doing what it is that you do, And I think that for some people, the idea of retirement, if you haven't thought through some of these things, John, that you mentioned and that Zach was talking about, it can be kind of like that. And so I think that if we look at some of the things that we might be anxious about, so just to talk about things that aren't specifically financial, because if you've put together a signature life plan, you have a pretty clear and reasonable expectation for how confident you can be in doing the things that you want to do. But sometimes it doesn't feel like that because particularly when we untether, let's say, from work and a steady paycheck, you feel like you're out of control. And so I think there are probably 3 or 4 things, and I'm curious what you guys think or if there are some more. We talked about anxiety over our identity, anxiety over our income, perhaps anxiety over how we're gonna spend our time. And I think that those are some things that the more we can think about and address those ahead of time by thinking them through and having these conversations and going ahead and addressing and coming up with what our plan for those are, the less we tend to worry about the things that we feel like we can't control. I always say that the scariest day in most people's lives is the day the last W-2 or work paycheck clears the bank, because at that point you're dependent on whether or not the planning and what you've put up and all those things, you're dependent on the fact that those things now work because there's not more money for a lot of people coming in. Is that something that you see a lot of concern over? And if so, how do you help people deal with that?

Yeah, I think it's definitely something that I see concern over. I mean, I try to shape the conversation around Your signature life, it doesn't start at retirement. Whatever age or phase of life you're in when we start to work with you, that's when your signature life starts. You don't need to wait until that last W-2 hits to then really start living the way you want to. And so if you can cultivate and create that mindset and environment, a relationship between you and the client, you know, along and along, I think that transitions that much easier if you're already living the life that you want to design for yourself before retirement. It's kind of a more seamless transition.

It definitely makes sense. I'm a big fan, John, of controlling what you can control. And I think that for me, when I'm dealing with clients in transition, one of the things that I like to try to help work with them on is keeping as many things the same as possible. You know, we all have these 10 things that are pretty constant in our lives. And for me, one of those is when I get paid. And so one of the things that I tend to do when I'm building out retirement income plans, or when folks are going to get distributions, let's say, from their savings or investment accounts, is I like to try to match up when the distributions, the timing and the amounts, with what they're accustomed to from when they were working. So that for me, and I'm curious how you do this, for me, There are lots of other things to deal with, but the money comes the same time that it always did because most people have a system for how they tend to deal with their regular routine bills. And so one of the things that I have found helpful is to try to keep that part of things the same while they're still dealing with the transitions of maybe not going into the office. What are your thoughts on that?

We try to do the same thing. I mean, cash flow is a huge part of the planning. That we do because it is very important. I mean, everybody's so used to the system that they have, whether it be just sharing one joint account and doing what you do out of that, or in a lot of cases, our clients will have different bank accounts that maybe one's for golf expenses, maybe one's for vacations, maybe one's for taxes and insurance, whatever it is. And they have their own system of funneling money into the different places so they know It's there when they need to pay for things. And it all starts with the money coming in. If it comes in at the same time, it's not going to impact any of the outflows. And it makes people more comfortable if they know that that part of it is not going to change. The rest of what they're doing on a day-to-day basis may change, but the money part stays the same. And you got to pay attention to that.

Yeah. And Zach, I know one of the things that you're a fan of is utilizing whether it's savings or investment accounts, some of your accounts, let's say for example with Signature, to have auto-drafted. And so that's another strategy is, you know, taking some of the routine expenses and going ahead and creating a way to have those paid for. Am I right?

Yeah. Auto-draft. I mean, automation, anything you can set up, build a system. I mean, that's essentially everything we do is built around a system of rules and understanding how these processes work. What bills are coming in, what money's coming in, and automating that as best as possible.

Again, when we look at structure, I think that a lot of it is controlling what we can control. So we start with money flow, and we can help with that in terms of making sure that, again, your savings, your investment accounts are funding your— we'll call them spending accounts— on a regular basis. And we can keep that So first we try to kind of keep that the same. And again, these aren't financial things, but these are things that as advisors, as life advisors, if you will, that we can help and delve into is then the next thing becomes, John, you talked about it earlier. What's my strategy for how I deal with my identity? How am I going to identify? And one of the things I'd point out is that while for most of our clients, this is the first or second. Time that they've done this in terms of if they're leaving work and dealing with uncertainty. For us, having years and years of experience with lots and lots of clients, it's not ours. And so having this conversation with us is great because we've seen the way that a lot of people have dealt with these things and can share that cumulative experience with folks to help them figure out how to deal with identity. So you've got the money, you've got the identity part, and then the third part, I think, is time. What am I going to do all day so that I make sure that I'm not spending all of my day worrying about money or current events or things that frankly I've already built a plan for to make sure that I have some confidence around the long term? What am I going to do with my time? John, do you see a lot of folks dealing with that? And if so, what are some of the potential solutions for that part of things?

Chip Munn: Yes. I mean, everybody's got that to deal with for sure. And like you said, we've got lots of different client experiences to draw from whenever we're planning for somebody new that might have some of the same questions, not all the time, but some of the same questions. And one of the aspects of our planning strategy is to use the what-if game. And it can be used in a lot of different ways. So what if the market drops 20% in the first year that you've decided to retire? What if it happens again in year 2. What does that do to spending? What does it do to the overall plan? Those are some common questions right in the beginning. And then some other what-if questions. What if I don't retire at 65 whenever Medicare starts? What if I retire at 64? What would my spending plan look like? What if I retire 2 years early? How does that work and how do all the ins and outs fit together? And then what if on a fun way, what if we take a 2-month vacation every year to Italy and spend time over there going through the mountainsides and the different wineries and all of that? What if we decide to buy a vacation home closer to our kids and spend some time where they are every year to help take care of our grandkids? Those are the kinds of things that we can all ask about, go through, and it's very helpful when you're having those conversations to listen as an advisor and listen and try to parse out what the client's actual goals are. If somebody comes up to you and asks you what your goals are, do you have a good answer for that every single time? Maybe sometimes it's easier than others. Maybe sometimes it's difficult. There tends to be an uncomfortable silence when you ask somebody what their goals are sometimes. So sometimes by listening to their answers and playing this kind of what-if game, we can kind of help them figure out from their answers and words what their actual goals are and kind of lead them down that path. Because I do feel like clients with more clearly defined goals find it easier to be comfortable in the plan that they've chosen than ones that don't have clearly defined goals. Zach, do you get that same sense?

Yeah, I think so. And even if those goals change frequently, if you've clearly laid them out with great thought and detail, and then you want to make changes to that as you go, which is not uncommon, it's a lot easier to do that. But if you haven't spent a lot of time thinking on that beforehand, it's kind of hard to have a picture of what you want to do. So without having a clear idea of where you want to be, it's kind of hard to ever get there. So I think it's really important, obviously during retirement, but especially before retirement, to have a clear goal of what are we trying to get to and what do we want to do.

And I think that's a big difference between an investment plan and a financial or a life plan. I think that that really kind of encapsulates that difference because the investment markets do change. But if you've got a long-term plan for the investment part, normally there's not a tremendous amount of deviation that necessarily needs to be made from that. But life changes a lot. There was a commercial, I think, I don't remember who from, but it said, life comes at you fast. And that's true, and it's messy. And so it's important to me to remind even advisors, but clients, that revisiting your plan is important. That can help with the anxiety and coming back and playing the what-if game because things are different. And the other thing that I would remind folks is that very, very few decisions are irreversible. And so, one of the things that we often help people with is figuring out other alternatives that, based on our experience, we've seen people be successful with. You know, if you decide to change jobs or to leave the workforce or to do a lot of things, very few of those decisions are irreversible. It's not like you can't decide to go back and do something different. And I think sometimes when we're feeling uncomfortable with transition, then it's very easy for us to lose sight of that. And so, That's a big part, I think, of what we're here to help with. Zach, any kind of closing thoughts?

Yeah, I mean, off that, I would just say a client's plan can change drastically at any point. And I think it's important for us to make sure that we've got an open relationship with the client and that we're building a culture with our clients that they feel comfortable coming to us and talking to us about anything. And not just once a quarter or however often when we have our reviews, but that they can reach out anytime. Ask a quick question, tweak a few things, get some feedback, and we're always going to be there for that conversation. Because if they don't feel like they can get ahold of you and just run things by you and clear their head until the next review 3 months from now, that weight is kind of sitting on their shoulders. Things are building up in their mind, uncertainty that's really probably not necessary. So just keeping that open relationship with all of your clients is key. And in the retirement phase, what to do with your time and money. I tell a lot of folks that money can't buy you happiness, but giving it away can, and not just your money, but your time and knowledge and everything that you've built throughout your working career. So if you find a way in retirement to give back to people, I think that's one of the most gratifying feelings you can have. So if you're looking to kind of replace that value you might have felt while you were working, getting paid for whatever it is that you know and did, I think that's a great way to kind of transition and keep that same value emotionally, at least.

Yeah, and Zach, you touched on it's important to have a good relationship and be able to talk through things. And I would just point out in closing that if you're listening and you're not a client of Signature Wealth yet, reach out to any of our advisors. You're welcome to have 30 minutes of our time, no questions asked. We're happy to answer questions to try to give you some sort of confidence or peace of mind. A big part of our job sometimes is just trying to ask the right questions. So if you're a client, obviously reach out anytime, but also if you're listening and you don't work with a Signature Wealth Advisor, do know that we're here to help and you're welcome to some of our time with no questions asked. John Tate, enjoyed it, man. Let's do it again next week.

I mean, we might ask one question. We might ask, what if?

What if? I like it.

See you next week, buddy.

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