Traditional Retirement Planning Advice Isn’t Getting the Job Done

In my book, my seminars, my radio show, and my workshops, I cite statistics about the effectiveness of traditional retirement planning advice that many people find shocking.

Here are just a few examples:

Even though most retirees hope to draw their last breath in the home they know and love, only 30 percent will achieve that goal.[1]

Nearly every retiree hopes to avoid becoming a burden on family members during their later years, yet more than two-thirds of retirees will feel guilty that they have become the very burden they were hoping not to become to their loved ones.

Despite a lifetime of saving money, nearly every retiree loses assets paying for uncovered medical and long-term care costs. Some retirees get wiped out in the process.

I’m not making this up. These are published research findings, and they point to a question that more people need to be asking.

Why are Americans getting such poor results from traditional retirement planning advice?

As an elder law attorney who has spent the last two decades serving as a first responder to people whose retirement plans have imploded, I have a few theories.

As I see it, the problem starts with the “system” that has grown up around retirement planning. When you set up your first 401(k) deduction, you had your first encounter with this system, but it’s not until you start thinking seriously about retirement, that your interactions with this system truly begin.

You were probably told that the process would require working with several different types of professionals. You may have been told to consult a financial advisor or financial planner for help accumulating a nest egg and making investments. You may have been advised to call an estate planning attorney to create your legal documents. You may have been told to work with a CPA on tax issues, a realtor to find that perfect retirement home , and an insurance agent to purchase a long-term care insurance policy. You may have been told to seek help from a professional when you sign up for Medicare when you turn 65.In short, you were made to recognize that retirement will require planning around many different issues, and there are professionals who can help with just about any of these issues.

This is the traditional approach to retirement planning. I call it Bumble Bee planning. You work with many different professionals, flitting from expert to expert, from topic to topic. You think you have a good retirement plan because you did everything the various professionals told you do to.

Despite the advice you’ve been given, your plan is flawed. You just can’t see it.

How can that be?

First, each professional you consult for retirement planning advice comes to you with their own unique perspective on what needs to be done to help you prepare. The financial planner will focus on investing and money issues, the lawyer on legal documents, the insurance agent on health insurance information, and so on. Every professional belongs to a unique industry that develops education and guidance for the members of its industry to study and impart.The problem with this way of developing retirement education is this: which industry will develop any education that does not serve the needs of the industry before it serves your needs?  In other words, if the industry cannot further its interest by giving you the information, you likely will not get the information. This leads to a disconnect between what the industry suggests you need to do and what you want as outcomes from your work with the professionals.

If you’re like most people, you want live out your retirement years on your own terms. You want to live a long life where you are functionally independent and financially secure. You do not want to fall ill and end up in a nursing home, become a burden to loved ones, and lose your assets to uncovered medical and long-term care costs. Yet, 70% of retirees do not die at home, 69% of retirees who face illness feel that they have become the very burden they never wanted to become to their loved ones, and almost all retirees lose assets to uncovered medical and long-term care costs, with a few getting wiped out in the process.

Can these results be seen as verification of the effectiveness of our system? Hardly. On the contrary, these numbers prove that our retirement planning system does not work. These results show that what most retirement planning experts are focused on is not necessarily your retirement planning objectives! Which professional has looked to you and advised you that he or she will help you develop a plan that will keep you out of a nursing home, while at the same time make sure that you do not become a burden on your loved ones? Likely, no one. And that is the problem. Every professional is educated and trained to help you with a slice of the retirement planning puzzle, but no one helps you put all the pieces together. 

Eventually, like millions of other retirees, you will be surprised when an illness or injury turns into a one-way ticket to the nursing home, forced impoverishment, and family burdens. You’ll have no idea what hit you, just like the woman in this article , whose life was upended by a stroke.

What if I told you there was a radically different way to approach the process of retirement planning? What if I told you that there was a way to harness what is good in the American retirement planning system so it works for you, while taking control of the planning process (and the professionals you trust to guide you) in a way you never dreamed possible? 

There is a way. It’s called LifePlanning and it bridges every gap in traditional retirement planning advice.

Learn more at AgingOptions.com.

[1] Amos Bailey and VJ Periyakoil, “Where do Americans die?”, Multi-cultural Palliative Care, Stanford School of Medicine, quoted in Michael Long, “Do the math: The chances of a swift, easy death are slim,” Matters of Life and Death, LancasterOnline, August 2, 2020, https://lancasteronline.com/features/do-the-math-the-chances-of-a-swift-easy-death-are-slim-column/article_1f518d60-033e-11eb-949e-03b07ed13985.html.

[2] Amy D. Sullivan, Katrina Hedberg, and David Hopkins, “Legalized Physician-Assisted Suicide in Oregon, 1998–2000,” New England Journal of Medicine 344, no. 8 (February 22, 2001): 605, https://www.nejm.org/doi/full/10.1056/NEJM200102223440811.

[3] Sudipto Banerjee, “Utilization Patterns and Out-of-Pocket Expenses for Different Health Care Services Among American Retirees,” EBRI Issue Brief, no.411 (February 2015): 1, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2570582.