Try asking these questions at a social gathering: “How much money will you need to enjoy a comfortable retirement? How much does that mean you should you be saving and investing each month?” Amazingly, these are questions most American workers cannot answer. According to the Employee Benefits Research Institute (EBRI), 58 percent of American workers admit that they have not calculated how much money they will need to retire comfortably. Moreover, of those who did do a retirement calculation, 8 percent said they arrived at an answer by guessing.
Why are so many people in denial and uncertain about their futures? Lee Eisenberg, author of the bestselling book
The Number: A Completely Different Way to Think About the Rest of Your Life,
says the standard advice (“pay yourself first” and save at least 10 percent to 15 percent of
your income
) fails to answer the real question that could make the difference between retirement success and failure. According to Eisenberg (thenumberbook.com), this question is “what am I saving for?”
In his general session presentation at the Financial Planning Association’s 2006 national convention, Eisenberg challenged advisors to prod clients and the general public into thinking about and planning for their futures: “Basically, most of them see financial planning and planners as a blur. It’s up to you to clear the fog.” Eisenberg claims that most people suffer from “IDD” or Inspiration Deficit Disorder, a condition characterized by inertia and fear. “This could be why so many boomers are so allergic to the process of disciplined financial planning,” he says.
The day after Eisenberg gave his talk, he co-facilitated a handful of small discussion groups for nearly 80 planners in total. One, co-led with industry thought leader George Kinder, CFP, centered
around
the life planning revolution brewing in the financial services industry. Another, which I had the privilege of co-leading, was called “How to Generate Better Conversations with Current and Prospective Clients.” All participants agreed that they, as financial advisors, are more likely to create successful planning relationships by drawing out their clients’ true passions. “This is one of the reasons that George and I wrote
Lighting the Torch,
” says Susan Galvan, CEO and co-founder of the Kinder Institute of Life Planning (KinderInstitute.com). “Planners know they need to be doing something more, something beyond just crunching the numbers, but they’re not sure how. They need a methodology to follow.”