Ep 88: What Retirees Want: An Overview

Listen Now:

The Smart Take:

Have questions?

Need help making sure your investments and retirement plan are on track? Click to schedule a free 15-minute call with one of True Wealth’s CFP® Professionals.

http://bit.ly/calltruewealth

Subscribe:

Click the below links to subscribe to the podcast with your favorite service. If you don’t see your podcast listed with your favorite service then let us know and we’ll add it!

• Apple Podcasts
• Google Podcasts
• Spotify
• Stitcher
• TuneIn
• Amazon Music

The Host:

Kevin Kroskey – About – Contact

Walter Storholt:

Well, hey, there, and happy new year to you. Welcome to Retire Smarter. Walter Storholt with Kevin Kroskey President, Wealth Advisor at True Wealth Design, serving you in Northeast, Ohio, Southwest Florida, and the greater Pittsburgh area or wherever you are. Schedule a time to meet with an experienced advisor on the team at truewealthdesign.com. Kevin, did you enjoy the holidays and have a good start to the year so far?

Kevin Kroskey:

Yeah, everything is fantastic. The girls, there’s a little bit of worry initially, because we did the migration from Ohio to Florida just after Thanksgiving. And oh my gosh, is Santa going to know where we are? Is he going to get confused? Are we not going to have presents? And no worries. Santa found the kids and everybody had a fantastic Christmas. What about you?

Walter Storholt:

Yeah, that’s fantastic. Yeah, we had a great time. Connie was working over the course of the Christmas weekend at the hospital, but we had the following week to head up north to visit family, got to see a couple of family members that we hadn’t seen since the beginning of the pandemic. So it’d been two Christmases ago that we’ve seen them. So boy, that was rejuvenating and fantastic to see everybody. So yeah, it couldn’t have been better from that standpoint.

Kevin Kroskey:

Awesome. Awesome. And the new year is off to a good start. Well, at least I think mostly. I mean, I guess the positive news is we didn’t get the tax increase that we were expecting. So I’ll take it as a positive.

Walter Storholt:

Anytime that happens is a good thing, right?

Kevin Kroskey:

I think so. I’m not going to argue with that.

Walter Storholt:

And your family is in a stable situation now that you’re settled back in Florida, but the business grew a little bit recently, right?

Kevin Kroskey:

It did. Last year was our best year ever for just overall growth in terms of some of the key metrics that we used to track the business health and how we’re doing. We did complete a blind client survey in the fourth quarter as well, which we received the results. I’ll be sharing that on an upcoming episode after we do some further dissection, but yeah, we’re now over about 300 clients that we take care of and taking care of about $400 million on their behalf. And we’re happy to announce that we actually have a recent merger. And so Capital Financial Group is a small financial planning practice in Akron, Ohio, and Rick Peterson, I’m very honored to say reached out to me and our team to be the successor for him as he enters retirement. And we came to an agreement last year and that is now in full force as we speak. And so we have a bunch of new clients that we welcome to True Wealth and are looking forward to meeting and taking great care of as well.

Walter Storholt:

Well, that is fantastic. And yeah, welcome to the family, those of you who are new to the True Wealth Design team and also the podcast. So welcome to Retire Smarter. Hope you get some great education along the way as we talk about financial and retirement topics, each and every episode. And we’ve got a good one on the agenda today, Kevin, I’m interested in your takeaways as we look at what retirees want from history into the future. So a little historical perspective we’re in store for today.

Kevin Kroskey:

You got it. So when we recorded our last episode late last year, we did a couple of fairly technical conversations, which I’m always a little reticent to talk about a lot of numbers over the podcast, but I left it that I was going to be reading a book with some time off over the holidays. And the book is called “What Retirees Want”. And it was recommended to me by somebody that I respect. And so I’ve been digging into it over the last few weeks and I thought I would talk through it. Some of the things that are conveyed in the book, some of the things that intertwine some practical examples from our client base, and what I’ve seen in practice over the years and just share what I’m learning from it. So a little bit of a softer side and not so many numbers.

Walter Storholt:

I like it. And we’re going to do this on at least two episodes of the upcoming additions of Retire Smarter. So this will be fun to get some different takeaways. Before you dive in Kevin, is this a book you would recommend that other people go and read, or is this more of like an advisor book and not so much for the average consumer?

Kevin Kroskey:

That’s a good question, Walt. I was asking it of myself and I didn’t have a clear answer just yet. And the reason why I say that is, and I’m sure anybody that became an expert in any certain area, the more that you learn about that area, there’s somewhat of a diminishing level of returns. So for me, at least so far, I haven’t completed the book, but to date, there’s been a lot of information that I already know. To the average listener that may not be the case. So they may be getting a lot more out of it than I do. So I’m not completely disappointed. I do have a few points of objection and I’ll talk about some alternate sources and data studies that I’m familiar with that is maybe a little bit at odds with some of the points in the book, but I can say the people that wrote the book, I mean, it was by Wiley, W-I-L-E-Y, “What Retirees Want”.

Kevin Kroskey:

And there’s a gentleman by the name of Ken Dychtwald, who’s done a lot of research over really the last 30 or 40 years. He has a company called Age Wave that specializes in this area and just aging and some of the impacts both individually, as well as in the economy and how businesses can better meet the needs of people that are aging. And then there’s the gentleman who wrote the book, Robert Morison. So he’s an author and consultant. So they’ve done a lot of joint work over the years. Some of their work has been commissioned by some large financial firms to do different research and so on and so forth. So, and these are definitely, I would say two heavy hitters in the space, but I don’t know, I’ll hold off on the yay or nay recommendation until I complete it.

Walter Storholt:

All right. Perfect. Well, I’m looking forward to your analysis. Where to begin.

Kevin Kroskey:

Yeah, so I added from history to the future. I think a little bit of historical perspective will really set the stage here to really understand some of the things that are impacting retirements and satisfaction and things along those lines. So I guess, let me just ask you a question, Walt, I don’t know. I mean, you talk with a lot of financial folks. Are you aware of where the concept of retirement originated?

Walter Storholt:

Oh, where the concept of it? No, I’m not.

Kevin Kroskey:

Where, or when in history-

Walter Storholt:

It’s a relatively new idea, right? This isn’t something that people have been “retiring for thousands of years” thing, right?

Kevin Kroskey:

Yeah. I guess retiring over the thousands of years really meant death.

Walter Storholt:

Right.

Kevin Kroskey:

You worked until you died and that was really the pre-industrial revolution. So you think about when the society and economy were more agrarian-based, it was more family-based and you probably worked on the family farm or something of the like, until you couldn’t anymore.

Walter Storholt:

You just kept slowing down and then eventually stop was death.

Kevin Kroskey:

You got it. And then once the Industrial Revolution happened in the early 1900s, really in the US, and you had the assembly lines and what have you, it became a concept in the US at that point in time. Older workers may not have been able to keep up the pace that they once could on assembly lines that younger workers could. Social security was created in 1935, in the wake of the great depression. At that time life expectancy in the 1930s was only in the early 60s. And by the way, social security didn’t initially start paying out until you were age 65. So on average, when it was put in place, you weren’t expected to get it because you were expected to pass away a few years before.

Kevin Kroskey:

So that’s really when it started changing. If you look, I would say maybe the third stage, and that’s really what the authors talk about in the book. You have that first stage pre-industrial revolution, then you had it retirement, really being an idea here in the US with coincidence to the Industrial Revolution. And then really, as our society here became wealthier, you saw a lot of increasing longevity and people were living much, much longer rather than living in their early 60s in the 1930s. Today, I mean, they’re adding a couple of decades to it. And when you look over time, really what you found was the average retirement age decreased from age 70 in 1950. So age 70 in 1950 to early 60s, 63 in 1990. So when you see a shift like that, I mean, it’s just such a huge impact. And we’re all familiar with this. You think about your parents or your grandparents or elderly people.

Kevin Kroskey:

We’ve all seen this to varying degrees over time, but one of the things I really did like about, really just a phrase that the authors talked about, was having time affluence. So having time affluence. So you have from the point that you retire to the point that we leave this earth, I mean, there could be a multitude of decades there. And before, and this is moving from what the author’s called the third stage to the fourth stage, before it was the golden years. And maybe, hey, you have some travel and leisure, going on a cruise ship or whatever, but really maybe a little bit more sedentary. Betty White just passed away. I think it was last week or so.

Walter Storholt:

That’s right.

Kevin Kroskey:

And,

Walter Storholt:

Just shy of her 100th, I think it was.

Kevin Kroskey:

Yeah, just shy. And I remember The Golden Girls being on when I was growing up and back then, I mean, most of the ladies that were on the TV show were probably like late 50s, early 60s. And Golden Girls, and if you say that today, I mean, I don’t know about you, but I certainly don’t think of somebody like late 50s to early 60s as being in their golden years. I mean, it’s man, has it just shifted a ton over the last few decades?

Walter Storholt:

No, like 50s, I’d say I know a lot of people in their 50s, I’d say they’re in their prime. I mean, they’re rocking and rolling in their 50s, and people doing some amazing things.

Kevin Kroskey:

Yeah. And so with this increasing longevity and wealth is definitely correlated to that. On average, wealthier people live longer than those that don’t have it. It’s just the way that the world works good, bad, or indifferent. But our country is and the world, in general, has certainly gotten wealthier. We’ve had so many advances in medicine and other areas of our lives that, we’re obviously living longer and not just longer, but many of the years that we are living are healthier than what they used to be. You don’t have to be sedentary at 65. The old saying that we’ve talked about over the years or the analogy is, the 60s are the “Go-Go” years, the 70s are the “Slow-Go” years, and the 80s are the “No-Go” years.

Kevin Kroskey:

And that keeps getting pushed back over time and I think that’s a wonderful thing. But the authors really drew a distinction between no more golden years, but really moving towards staying active, staying engaged, being purposeful with this time affluence that you have in retirement. And so when you think about retirees that exist today, I mean, you could have still what generally could be painted as older retirees. So non-baby boomers, kids that when they were kids anyway, with that world wars that they were dealing with when they were young, their parents definitely were hard hit through the depression. So that was really stamped on their being growing up as a child. They tend to be more frugal, more straight-laced.

Kevin Kroskey:

And then as any old Dennis Hopper commercial that you would see from Ameriprise or something like that. You have the baby boomers that were doing the “Easy Rider” back in the days, and now they’re continuing to change the world and be the rule breakers and the risk-takers. And it’s definitely different. It’s hard to paint I think, in those broad stereotypical fashions, whether you’re talking about a generation or anything like that. People are snowflakes, but I guess broadly speaking in aggregate I think there is some truth to it. I’m sure we can all think about people that we have in our lives or had in our lives where you could identify having some of those more stereotypical traits.

Kevin Kroskey:

In my life, personally, my grandfather on my dad’s side, he was, I mean, he was that old school guy. He and his brother-in-law built their house, built the house that he lived in for more than 50 years. He worked for a company called American Bridge, which I grew up in a town called Cambridge, a small company town on the Ohio River, outside of Pittsburgh. It was at least purported to me to be in the Guinness Book of World Records for having the most churches and the most bars per capita. But I’m sure there’s a lot of small, old run down towns that probably would maybe stick a claim to that.

Walter Storholt:

Similar claims. Yes.

Kevin Kroskey:

And my grandfather retired in his late 50s and he retired with a pension. He retired in 1978, I believe. And they bought a little Winnebago, traveled around. They would just show up at our house. We lived about 20 minutes away and it would just be like, “Hey, we’re here. Make some room at the dinner table.” And you had this time affluence. They were only in their 50s at that point in time. And even though this was the 70s and through the 80s, they had their health, they had time and family was important to them. Traveled all around the country.

Kevin Kroskey:

And then as they got up there in age, it became, “Hey, if you wanted to see grandma and grandpa” you were going to their house. It just changed. Getting around was more difficult. Driving became more difficult. Really it was just a grocery store, their little diner, and church. And that was pretty much it after a while. And my grandfather passed less than 10 years ago and was just a little bit shy of his 99th birthday. And he just had a great sense of humor. I have his driver’s license and he showed it to me and he renewed it at age 98 in Pennsylvania, it was good through age 102 and he showed it to me.

Walter Storholt:

Wow.

Kevin Kroskey:

He’s like, “Do you believe these idiots”? So I guess I think of my grandfather and he certainly beat that longevity, beat the averages, and had a very, very long life. And maybe he was, I don’t want to say a trailblazer, but he was one of these, more of the early on sort of older retirees to have this really extended retirement. He used to joke about his pension. He worked his entire life, but he was receiving his pension for more years than he worked for the company, which he worked for, for almost his entire working career and it’s different. But that story obviously has always stuck with me because it’s personal. And I always held my grandfather in high regard, but I think it also illustrates pretty well how retirement has changed.

Kevin Kroskey:

In this new retirement, again, even though my grandfather wasn’t a baby boomer was, he was in the Korean War, actually, he was in World War II as well, but he was, I guess he shared a little bit more with some of the Boomer traits. And I think the Boomers have definitely taken it to a different level today. And definitely today, one size doesn’t fit all. You think about the time affluence that we have and the authors talk about certain zones that, that time affluence impacts things like work, which may sound counterintuitive. We’re talking about retirement, but now we’re talking about work and we’ll explore that more in the next episode.

Kevin Kroskey:

Leisure, which is certainly a little bit more commonplace or typical when people think of retirement, health, which is certainly the staple of happiness. If you don’t have your health, probably not going to be incredibly happy in retirement. The authors talk about family. Candidly, I would probably rephrase this as relationships. I’m very familiar with work that others have done in this space and retirement satisfaction where their conclusions show that it’s not really about having family, but about the quality of your relationships with others more broadly, whether you share a common bloodline or not, things impacting your home, where you live, finances, of course, as well as purpose.

Kevin Kroskey:

And just a few tidbits from this, but in terms of work, the authors quote regularly throughout the early parts of the book that seven and 10 workers expect to work past the age of 65. And we’ll dive into this a little bit more in the next episode, but I can tell you in actuality that, that and this isn’t just from our client base, but that tends not to happen. So there tends to be a difference between your expectations while you’re still working and then what actually happens. And I’ll leave a bit of a cliffhanger here, but it may not be what you expect. And the data does show that people don’t work as long as they tend to think that they will.

Walter Storholt:

You’re ringing bells in my head already. I can think of my folks fitting right into that category. Dad being in that category of I’ll never stop working. I’ll never be able to stop working. And mom thinking probably she was going to, sure didn’t want to, but probably would have to work till 68 or something like that. And here they both are a little over a year away now and both will be done at, or before 65 so.

Kevin Kroskey:

Interesting.

Walter Storholt:

Definite disconnect there between expectation and reality.

Kevin Kroskey:

Absolutely. I’ll share a lot more. I have a lot of client stories to share about that and related in the next episode. But all those things, when you have a lot more time and you think about all the things that will impact your life and happiness and satisfaction, and just some of the things that change physically for us as we age, particularly as it relates to our home decisions and what have you really, the book gets into impacts on all these areas. And when you come down to it, there may be some broad categories or broad groups of people, but we’re all those snowflakes. I mean, it’s so individualized. It’s really about what you want and what you want to make it. And from my own personal experience, sometimes people know this going into retirement. They know where they want to spend their time.

Kevin Kroskey:

They already have really well-defined social circles outside of work, which tends to be pretty important. And it’s like they don’t miss a beat. They just change where they’re spending their time. But usually, it’s a little bit more passion-driven and the relationships are there. They’re financially secure. They’re doing some things for fun. They check the boxes on the leisure and travel and bucket list and things like that and it’s great. Other times and this is a regular occurrence, it may take a while to find that groove. Any transition evokes stress, whether it’s good stress or bad stress. You see, generally speaking, that a lot of people will have a grass is greener sort of mentality for a while, and they’ll really enjoy it. Some people may get bored with it quite candidly, and then really work to find that groove and find out where they’re going to get satisfaction from spending their time.

Kevin Kroskey:

But in general, no doubt retirement has evolved over time. It’s going to continue to evolve. And the key point about this, it’s really two things. I mean, it’s our increasing longevity and we’ve had such a wealth increase in this country, particularly over the last 100 years or so that it’s just given us so many more options versus what prior generations have had. So I think that’s hopefully setting the stage fairly well for where we’ve been historically and where the future is going to continue to evolve.

Kevin Kroskey:

Again, who knows, but you see some people making predictions that our longevity is going to be significantly more than what it is today, COVID aside and some of the things we’ve been dealing with more recently. I don’t think we’ll really get into the idea of the average person living to 120 or 130, but there are some pretty smart people out there that think that’s within reach of our lifetime, which is exciting and scary, all rolled into one when you think about it. That’s a completely different financial plan. But this time affluence that we have, I mean, people have it to varying degrees and we have more resources. So how you’re going to spend that time intentionally and derive satisfaction, it’s going to continue to evolve and probably continue to improve giving us more choices. But I think with anything you really need to be intentional about it to drive that satisfaction.

Walter Storholt:

Going to be interesting when we start staying retired longer than we worked in our lives. That’ll be, I mean, I guess some people are getting pretty close to that milestone with their longevity at this point. And if we indeed go to 120, 130, we’ll definitely be surpassing that. It’s weird to think about that a little bit, Kevin, but it’s pretty much on the cusp of truth perhaps in the next couple of years.

Kevin Kroskey:

Yep. My grandfather wasn’t far away from it. It’s definitely happening and it’ll be a much more common occurrence moving forward.

Walter Storholt:

Well, great scene-setter Kevin, looking forward to breaking down some of the takeaways from this book in future episodes as well. Again, it’s “What Retirees Want”. We’re going to be picking apart different parts of this book, getting Kevin’s opinion on where he agrees and disagrees with certain elements, bringing to light several different I think, very valuable conversations, all coming up for you in the future. If you’ve got any questions at any time as you listen to this episode or past episodes of Retire Smarter, and you want to talk to Kevin about meeting, having a conversation about questions you have about your plan for the future, your finances, your retirement plan, get in touch very easily by calling 855-TWD-plan, 855-TWD-plan. Or you can go to truewealthdesign.com. That’s truewealthdesign.com and click on the are we right for you button to schedule a 15-minute call with an experienced advisor on the True Wealth team. Again, that’s truewealthdesign.com or just check the description or the show notes section of today’s show for the necessary contact info. And thanks. Kevin, great first episode of the new year. Looking forward to another one with you soon.

Kevin Kroskey:

Thank you, Walt. Happy new year.

Walter Storholt:

You as well. Thanks for joining us and we’ll see you next time on Retire Smarter.

Disclaimer:

Information provided is for informational purposes only and does not constitute investment tax or legal advice. Information is obtained from sources that are deemed to be reliable, but their accurateness and completeness cannot be guaranteed. All performance reference is historical and not an indication of future results. Benchmark indices are hypothetical and do not include any investment fees.