Lewis Schiff
Lewis Schiff
The New Retirement: 70 Is Yesterday's 50

For many affluent clients, the economic crisis means leaving behind old ideas about retirement and creating new long-term goals.

March 19, 2009
by Lewis Schiff

Well before everyone's assets took a battering, the concept of "New Retirement" was well ingrained with near-retirees as well as those who recently entered the retirement zone. While aspirations of endless golf, cocktail parties and grand-parenting sufficed for a leisure-defined lifestyle of previous decades, today's affluent who've been beset with shrinking portfolios may need to take a look at their future in terms of "retirement careers" and a daily schedule fueled by the same kind of boomer energy that drove their middle years. That's not as bad as it sounds since today's 70-year-olds are performing physically, mentally and attitudinally they way 50-year-olds did in the past, according William C. Byham, author of 70: The New 50.

Lee Iacocca, for example, has not spent his retirement years waxing a sailboat and sipping ice tea since leaving his role as CEO of Chrysler in 1992. (Five years earlier in 1987, he was the highest paid chief executive with a total compensation package reported to be $20 million.) Since then, he's focused on philanthropic and entrepreneurial pursuits — and stayed in public view through books and speeches.

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On the business side, Iacocca devoted considerable energy to the development of electric vehicles — first an electric bike, then cars — with mixed bottom-line results. He's described the working on the start-up of the electric-bike venture as harder than his last two years at Chrysler, but he's gained greater satisfaction doing business in a direct, immediate way that he never could as head of a major manufacturer.

For example, less than an hour after meeting a new supplier for the first time, Iacocca was ready to cut a deal — without the corporate committees, board of directors or shareholder discussions that followed him at Chrysler. For him, retirement also meant the aspiration of conducting an entrepreneurial life as a small-business owner, something he never did in his preretirement years. From an advanced-planning team perspective, Iacocca's mix of philanthropic activities, profit-making business ventures and the management of his personal portfolio, clearly represent a very active retirement life that requires analysis, projections and modeling — not just creating a lifetime income stream.

It's Not the Money

In a Merrill Lynch survey about retirement attitudes among a broad spectrum of Americans, the findings offer some surprising insights into the importance of creating the appropriate retirement "ecology" to achieve happiness. For those aged 60 to 70, for example, the three most important reasons to work during retirement have nothing to do with money: keep mentally active, keep physically active and keep connected with others. Also, having a retirement career seems to drive a positive retirement experience. Those who work part-time on their own terms find the retirement better than they expected and are more satisfied than either those not working or those working full-time.

For those planning on working during retirement, most want to pursue a different kind of work experience, such as Iacocca. Of this group, the majority have taken some steps to prepare a new career by talking with others, researching opportunities, attending training classes, examining the financial issues or other activities. Becoming a consultant is the most popular choice for 60-year-olds to 70-year-olds.

Other key findings include:

  • Having a "retirement career" is part of an ideal retirement scenario for a majority of interviewees.
  • Approximately half who plan on working, expect they'll never stop completely.

The ideal form of working during retirement is alternating periods of work and leisure, which aligns with those seeking a consulting career or similar project-based employment. Sharing and passing on knowledge ranked high on the preferences of boomers.

Finances and the Perception of Retirement

Slowing down and entering a perpetual vacation for the rest of their lives is no longer the goal for s large percentage of retirees, so retirement takes on multiple possibilities as social conventions accept broader solutions at all levels of society. Age Wave, the firm started by Ken Dychtwald that researches population aging and businesses' response to it, found retirees fall into four psychological groupings:

  • Ageless Explorer. This group personifies the pursuit of the new retirement — a very active new phase in which they would rather have a cramped schedule than put themselves at risk of being bored and complacent. They seek new career opportunities and participation in their communities. They're typically confident about their financial preparations for retirement and its emotional challenges. They don't see themselves as ever becoming "elderly." For "Ageless Explorers," retirement is a food festival with more surprises and discoveries just a few steps ahead.
  • Comfortably Content. These retirees embody a classic vision of the easy-going, low-ripple later years, where relaxation and few challenges are the goal. Work is something they did before retirement. They feel financially secure, travel and pursue leisure activities. For the "Comfortably Content," retirement is comfort food at the favorite dinner.
  • Live for Today. They're vigorous and act young — and they're ready for a retirement that will be personally fulfilling. Their financial and strategic planning for retirement is often lacking, so they may feel unprepared and worried about the years ahead. Affluent clients are not immune from this group: executives near retirement with investment portfolios consisting of almost all company stock suddenly worth 10 percent, professional athletes with limited time to earn income and too much time to spend it before their retirement, financially-unsophisticated children who inherit large sums without restrictions and spend down principal before they have their first gray hair and so on. For the "Live for Today" personality, retirement is dinner in a trendy restaurant more known for the scene, than the cuisine.
  • Sick and Tired. These folks have fewer financial resources and expectations for a satisfying retirement. They are least likely to have interests outside their own retirement challenges. The "Sick and Tired" are eating leftovers.

Advanced planning can certainly help assure the retirement for Ageless Explorers and the Comfortably Content. If you can work with the Live for Today members early enough before their financial situation reaches too critical a point, you can potentially bring about a dramatic new scenario and turn them in to Ageless Explorers.

High-Net-Worths, But Middle-Class Values

Your advanced-planning clients may have considerable assets but their attitudes toward retirement may more closely resemble middle-class retirees, especially at a time when so many portfolios have shrunk. Retirement income and expenses are still a concern of high-net-worth (HNW) individuals according to several studies released in the last years. Although a $10 million retirement might satisfy the requirements for most people, if that portfolio stood at $15 million a year earlier, the emotional impact of diminished income is real for those who expected more. If they already had some concern about the cost of healthcare even if they could afford medical coverage and long-term-care coverage, the recent economic decline can only intensify those concerns.

If your clients started out in life in a middle-class family, they're more likely to retain those values into their more affluent years, according to the anecdotal observations of advisors and studies by Prince & Associates, Inc. A $40-million client of Bedda D'Angelo, of Durham, NC-based Fiduciary Solutions, lives in the same modest neighborhood for many years and drives an old Mercedes.

If concerns about income and expenses represent two aspects of the planning mix, then the client's attitude toward retirement — as Ageless Explorer, Comfortably Content or some combination — regulates the direction of any solutions. When social and class conventions — and the aging process — no longer restrain possible lifestyles, more varied, customized retirement planning is required.


The transition from pre-retiree stage with a focus on career and accumulation of assets to the retirement stage with a redefined self in terms of career and finances can be bumpy for some. The urge to give back, in terms of being a consultant to younger professionals or philanthropic work, flows stronger for many as they plan and enter the retirement state.

It's this personal blend of new emotional and career needs that advanced-planning teams need to understand before creating any lasting retirement plans for affluent clients.

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Lewis Schiff is the principal of Advanced Planning Group, a family office network for advisors. His latest book, The Middle-Class Millionaire, was published in January 2008. View complete details on how to receive a free report on The Highly Effective Habits of Successful Advisors by the authors of The Middle-Class-Millionaire.