When it comes to hanging on to clients, maybe one of the best things that a financial advisor can do is to urge them, when the discussion turns to retiring, to keep working.
As a recent study by the American Psychological Association shows, those who work past retirement age suffer 17% fewer major diseases and less physical decline than those who quit working and start taking life easy.
The study found among those who kept working such health benefits as lower blood pressure readings, fewer cases of diabetes, cancer, lung disease, heart disease, strokes and even arthritis, and also fewer psychiatric problems, including dementia.
And of course, working longer means earning more and drawing down savings more slowly.
“It’s clear that if people stay mentally stimulated and involved, they end up living longer,” says Robert J. Glovsky, principal and vice chairman of The Colony Group, a Boston-based financial advisory firm.
Advisors can certainly play a role in helping their clients make the right decision, not just about when to retire but also about whether to retire or to fully quit working, he says.
“What I see is people wrestling with the question, ‘If I do retire, what’s my life going to be like? Why should I stop working if I like what I do, and I don’t have to stop?’” Glovsky says.
“We have these conversations with our clients all the time,” he says. “When people feel they are financially secure, they can see their work differently.”
Glovsky cites a physician client who, in his 50s, worked hard at his job to put his kids through college and sock away retirement assets.
The doctor was looking forward to retiring in his 60s, but once the financial pressures were gone, “he found out that he liked his work. With the financial pressure gone, he started enjoying being a doctor.”
That kind of realization can dramatically affect a client’s spend-down plans, Glovsky says.
“Of course, the people who really could benefit from working longer -- the people who do physically challenging work -- are usually the ones unable to stay at their jobs past 62 or 65,” says Anthony Webb, a research economist with the Boston College Center for Retirement Research. “And no matter what your job or financial situation medical issues can intervene in the best-laid plans to keep working.”
A retirement job can also be a different one that a job done previously.
“There are a range of choices for people who want to keep working,” says Anna Rappaport, principal at Anna Rappaport Consulting, a Chicago firm that focuses on retirement strategies.
She urges advisors to “supplement their traditional investment-focused approach” to financial advice with “helping clients to recognize how they can improve their opportunities to work longer and phase into retirement.”
Dave Lindorff spent five years as a China correspondent for Businessweek and has written for The Nation and Salon.com.
This story is part of a 30-day series on retirement planning strategies.