Preparing for a Fulfilling Retirement (Part 1)

Paul Winkler: And welcome. This is “The Investor Coaching Show.” Paul Winkler talking about the world. And the whole realm … have to come up with a different word besides “world.”

Michael Sharpnack: Universe.

PW: Universe of money. Whatever.

Yes, talking about investing, financial planning, retirement planning, and Michael Sharpnack up in the Goodlettsville office hanging out with me today. Michael’s a charter financial consultant, retirement income certified professional.

So he comes with a little bit of clout. Shall we say … gravitas. That was the word two or three years ago. And nobody uses it anymore. It was during the election, I think it was.

Everybody was using it. Does this person have gravitas? Are they credible? Are they … do they got weight behind what they have to say? Whatever.

So I know you want to talk about, which is usually an area that I love to talk about, psychology of retirement. Gee, we ought to just get straight to it. What do you think?

MS: Sure.

Psychology of Retirement

PW: So what psychology of retirement are you talking about? The getting into the process of retiring and getting your mind out of working into changing your whole life to something totally different, something that you haven’t done before because it’s something you haven’t done before. Is that where you’re going? Or are you thinking—

MS: Exactly. It came from the recent studies I’ve been doing in the RICP, the Retirement Income Certified Professional, and they brought up this whole aspect that we often think about retirement in terms of replacing a paycheck.

But people who are retiring don’t commonly think of it in terms of replacing all these other aspects of their life. When you work you get—

PW: Relationships.

MS: Relationships, you may have coworkers, there’s all this time that’s filling. There’s a nice sense of identity that there—

PW: That’s exactly what I was thinking. You are somebody. So that can be hard to walk away from. That you have importance and that comes from the work itself. And you have to actually realize that you have importance in way more areas than just work.

MS: Exactly. So there’s all these things that it brings that suddenly that’s gone.

There’s the Holmes-Rahe scale that they use to study the stressful events in someone’s life. How much that impacts someone’s life. Number one is the death of a spouse. That makes a lot of sense.

PW: Yeah.

MS: Right. Number 43 is getting a traffic violation.

PW: Number 43. Now, why did you choose 43?

MS: That was the bottom of the list.

PW: I saw a statistic on that. It’s like one in five people will get a traffic ticket every year. Something like that. Crazy.

I don’t know why I saw the stat. I saw the stat in “Reader’s Digest” or something like that. So that’s interesting.

I had actually heard, one time, I was going through … I was getting married, I had a job change. I was changing from working for an insurance company, I think it was, to going to a brokerage firm, and … I forget. There were several other things going on in my life at one time.

And somebody said to me, “Ooh, you have this number of changes in your life at one time. Watch it. Be very, very careful.”

And I thought, “Oh, that’s really interesting.”

It’s just, it’s like a pile of rocks that you’ve got you add another pile of rocks. And typically people do very, very poorly if they just take on stressors and they don’t have any outlet.

The person that just basically takes abuse, takes abuse, takes abuse, or maybe bottles up their emotions. And then ba-boom, so that’s probably a lot of it, isn’t it?

MS: Sure, absolutely.

So they actually have retirement listed at number 10 on the list of most stressful events that can happen to you. Number 10. And it comes from exactly that.

There’s so much that you’re having to replace that you’re not thinking about. One of the things you’re forced to change—habits—and you can’t teach an old dog new tricks. But another aspect of that is people don’t empathize with you because they think retirement’s easy. You’re retired.

PW: Yeah. You ought to be happy.

MS: Exactly.

PW: You ought to be doing really, really well. And they’re envious of you because you’re able to hang up things. But they don’t realize what you’re going through.

I remember my father always waking up at like five o’clock in the morning. He had this really interesting routine. He’d get up at five o’clock in the morning. He’d walk out to the living room. He’d lie down in the recliner, he’d fall asleep for another hour. That was just a habit that he totally changed as time went on.

So you get into these kinds of routines and when they change, it can be a little bit disruptive. So what are some of the things … are there statistics that … I know there were a lot of statistics in that particular course.

So you probably brought some of those, I would guess, being that we’re so much alike.

A Loss of Identity

MS: Absolutely. Some of the intro things there that you’re forced to change, people aren’t empathizing with you, there’s a loss of identity.

All this can create a lot of stress, and there’s a lot of things that can happen. Now, of course, this isn’t for everyone. It’s a very personalized thing where there’s a lot of variation person-to-person.

PW: I’ve had clients come in, and I said, “How’s retirement going?”

And they go, “I was born to retire.”

MS: Absolutely.

PW: And you get some people that are like, “I hate it. I have to go back to work.”

I remember, I think it was Jim’s dad, actually up here in the Goodlettsville office, who actually made that comment. “You know, I got to get back to work. I got to go.”

And then we had another one of the guys, his dad actually went back in a totally different field and totally different area of work. So yeah, some people don’t deal with it at all, but some people do.

MS: And to that, there’s also something they call the retirement honeymoon phase where maybe the first three, six months, maybe even a year, you got all this extra time on your hands. You’re just going for it, doing all these things.

PW: Sure. Golfing, and then you’re going, “I can’t golf any more.”

MS: Sure. Exactly.

PW: Yeah.

MS: There’s only so much you can do of that. They say it’s common to have your to-do list done by Wednesday and then, oh, what do you do with the rest of your week?

That dissatisfaction can start to set in. A little later too, even. Not quite right in the beginning. But one of the things they find is that depression actually goes up by 40% in retirement.

PW: That’s interesting because I know, statistically, most people actually reach their peak level of happiness in their late fifties.

You younger people and you’re going, “Ahhhh. Things keep getting better and better and better.”

And then if you get into this retirement thing and you do it right, it can continue to get better. Unless you don’t get it right, which is … I’m sure you’re probably going to get into some things that people can do to get it right.

So that does not surprise me at all because of the fact that you lose your sense of identity and value if you don’t plan this right.

MS: Yeah. And one of the things … I point all that out because it’s just not thought about often. I think one of the myths they point out, too, is that retirement’s just going to fall into place.

PW: Yeah. When you say that now, where my mind was going, as I was kind of blabbing about that, going how it may not necessarily go right if you don’t plan.

I was teaching a workshop this week. And we got to talking about some guy that during the pandemic decided that he was going to learn how to fly a helicopter.

And somebody in the audience said, “Hey, this person ended up going and flying a helicopter.”

I said, “Well, why?”

“I just always wanted to fly a helicopter.”

And I said, “Well I can see that.”

And I talked about the various planes. The little planes that are being made that the average person can fly. You know, like the BlackFly thing that I’ve talked about here before.

But you don’t have to … Two minutes in a flight simulator, and you got it down. You know how to fly this thing.

You Have to Plan for Retirement

And I said one of the reasons that I plan for retirement—and I think people ought to plan for retirement—are those inventions that are going to come along in retirement that you’re going to want to do.

And I can imagine if you’ve gotten to retirement and some invention comes out, that’s like really, really cool.

And just, whoa, I’ve always wanted to do that, but I can’t afford it. You know how that can be kind of depressing.

MS: Sure.

PW: I think. And how I really want to spend time with my kids but they live across the country and we can’t afford to go over there.

I really, really want to go hang out with friends and go to dinner. They can afford to go to dinner, but we can’t. So I can see where that would be a huge deal.

MS: Sure. There’s a funny statistic: 85% of people who escape from prison get caught in the first 48 hours, and it’s because they spent all their time planning to get out. They didn’t plan to stay out.

PW: They didn’t think about what to do after. The thinking of, Well it’s not prison … That’s an interesting statistic. You got to plan the whole thing. Not just the first step.

MS: Exactly. But going back to the depression and some of that stuff that can come up, there’s a bunch of stuff related to that.

There’s a 2003 study published by the Journal of Aging that found the most significant contributor to self-reported depression was a sense of loneliness because of that loss of social interaction and stuff.

There’s 22 high-quality interactions that we have during a day, they say. That’s how much we need. Even if it’s just talking to a coworker for a minute, or your spouse. Twenty-two.

That cuts in half in retirement to 11, so your quality social interactions are dropping significantly, or even more.

PW: You know what? That reminds me of a lady that I was dealing with. She was a much younger lady, and she was going out to restaurants all the time.

We were looking at the budget type of thing and just trying to make sure because she had inherited a significant amount of money and was just going out to restaurants and things like that.

And I remember having a conversation about this, and just saying, “Hey, you know what? You’re doing a lot of this going out all the time and it’s costing an awful lot of money. You’ve got this and we got to make it last.”

And one of the things that we tried to ferret out is why she was doing those things. What’s the why behind it?

And the why happened to be that she was incredibly social. Loved interacting with people.

And what we did is we said, “Okay, there are other ways that you can interact with people that would be less expensive.”

And the answer was, “Yeah, I could go work with a charitable organization. I could go work with women that are underprivileged. I could go…” And we came up with a whole list of other things that she could do to meet the same goal.

Which is not unlike when my wife and I couldn’t afford to go to a concert. I’ll never forget wanting to go see James Taylor in concert. Just couldn’t do it. Couldn’t afford it.

So I went to the library, rented the DVD for free, got a projector, and then projected it on the wall and sat and ate popcorn in the living room.

And, boy, was it fun? Was it memorable? Yeah. I’m still talking about it almost 30 years later.

It can definitely be something, you can meet those goals in other different ways, but the social interaction … as a matter of fact, the workshop I was teaching this week, that’s one of the things we were talking about. What your purpose for money is.

And one of the ladies out in the audience said, “Can I add something to this list?”

And I was like, “By all means.”

And that was her addition, that social interaction. The connection with people is her purpose. And I was like, “Whoa, why did we not have that on the list?”

MS: That’s great.

PW: That was really, really good.

MS: And I think it’s so important to know yourself in that way because some people need more or less social interaction, and that may not be something … but even if you’re someone who thinks you need less, there may be more of a drop in retirement than you’re prepared for or you’re thinking about.

PW: Sure. You can be one of these people who needs interaction but needs time to recharge. So you just set it up so that you get out.

And you might be a person who goes out and meets at the water cooler, talks to people for a few minutes, and then runs back to your office and just plans your life accordingly.

Don’t get too much because then you’ll get burnt out for another reason. Too much interaction.

Possible Effects of Retirement on Marriage

MS: There’s another big contributor to that is that it can put a strain on marriage. And this is something people don’t think about often, but suddenly you’re spending so much more time with your spouse and that may not always be a good thing and—

PW: It’s really interesting you say that. You know what the number-one stressor of marriages is?

Kaiser is a psychologist who actually did some work on this. Karen Kaiser, I think it was. Yeah, it was Karen Kaiser. She had actually done some research on this.

The number-one thing is controlling. If the spouse is controlling, that is the number-one source of dissatisfaction in a marriage.

Which is fascinating, because if you think about it, if you’re around all the time you’ve got more time to control that person. So that makes total sense to me.

MS: Sure. There was a Japanese study that found that retired men started driving their wives mad.

PW: Was it a short drive or a long drive?

MS: Exactly. And expectations is another thing that’s common—

PW: Hang on a second. Because I’ve got a comment on that.

That’s really interesting to me because I remember studying culture. And one of the things about kids in that culture is they actually didn’t think their parents liked them unless they were authoritarian.

There’s a difference between authoritative, which authoritative is you’re an authority on things but you have give and take with your kids. And Americans, that’s typically what we think of as being okay.

Authoritarian is where you’re domineering to a great extent. And it’s interesting to me that the husband in the house all the time might be domineering, which is that controlling thing.

So that actually fits, sure. That’s fascinating.

MS: Yeah. A familiarity breeds contempt, right? I mean, it’s a cliché, but that can happen.

PW: You need time to unwind and not be watched over and have some control in the relationship. That’s fascinating.

Have Realistic Expectations for Retirement

MS: So a study by the National Bureau of Economic Research found that people who were still working at age 65 when they had hoped to already be retired, had similar rates of depression as those who were forced to retire earlier than expected.

So one group is still working. One group was forced to retire early. So two different states, but the same rate of depression because their expectations were en masse.

PW: Yeah. That is a big deal with people, with humans, is what do we expect and are our expectations met? That makes a tremendous amount of sense to me that that would be a problem.

Because if I expect a certain thing … it’s funny because I get asked about that a lot of times: “You seem to be pretty happy and you’re positive all the time.”

I said, “No, I’m not positive all the time. My expectations, I keep them at a very real level, I think. I don’t expect everything to go okay. And by not expecting everything to always go okay, when things don’t go okay. I’m okay.”

And that’s very much to do with stock markets too. We talked about that with stock markets all the time.

If I expect my investment portfolio to constantly go up, I guarantee you’re going to be disappointed. There’s no question about it. You’ll be disappointed.

You need to know the level of expectation, as far as how much it could go off, how much it could go down and what the range is.

And once you realize, “Oh you know what? It’s going to go down one out of every three years on average.”

And that may be two years in a row that it happens. It doesn’t mean that every two years it’s up and then one year’s down. And then the next two years it’s up, because then you’d be able to time it, and you’d be able to get around that.

But isn’t the stock market an awful lot like relationships?

MS: Yes.

PW: And like retirement, and our expectations for those types of things and those events in life?

MS: Yeah, absolutely. And I think that’s why information is so important. Understanding. Because you don’t know how to set proper expectations if you don’t have proper information to understand what those expectations should be.

And that relates to both the stock market and I think, too, these areas of the psychological aspect of retirement.

Redeem the Time

PW: What else do we need to kind of think about regarding that?

MS: Sure. I think that it’s common for bad habits then to set in after an initial phase—

PW: Nature abhors a vacuum. So if you’ve got too much time on your hands, as the band Styx actually used to sing about, it got too much time on your hands, you’re going to fill it with something and it might be habits that aren’t necessarily good.

So what are some of the habits, out of curiosity, what are some of the habits people get into?

MS: There’s a cliché that the wife says, “All my husband does is watch TV on the couch.”

And so really just filling time with things that just doesn’t … isn’t really what even makes you happy. It’s just filling time with something.

PW: Right. And you know, you think about it. Why do people sit around and play video games, watch TV, or do those types of … screen time, social media, good grief. A lot of it is dopamine.

There was a really good article in the Wall Street Journal about dopamine overdosing. And it’s just a brain chemical that’s a feel-good chemical and you can get so much of it, and you have to wean off of it.

I can’t remember if I told this story on here. It’s worth telling again if you haven’t heard.

A psychologist was talking about this, and she was saying, “Here’s the deal. Think about it. I tell my clients to get off.”

And there’s a really good 30-day fast book on getting off social media, and it’s really a lot for kids, but adults as well.

And she says, “You know, the funny thing is I tell these parents, let’s do this. We’re going to get your kids off social media. We’re going to get them not doing this anymore.”

She said the first week, “You know what? The parents hate me. Because they’ve got to do it too. They hate me. They get all, ‘I’ve got to communicate with all my friends’ and they get really upset. And they don’t like doing it themselves. And the kids are hating them.”

And she says, “The second week, they’re like going, ‘I don’t like this, but okay.’ Then they’re begrudgingly doing it.’

And she said, “The third week, they discover dirt.”

And to me, that was so funny because they go out in the backyard and they discover that there’s more to life than sitting there blabbing with a bunch of people on Facebook about how wonderful their lives are and trying to make up things like everything is wonderful.

So that’s another thing. But you think about it, you get a dopamine rush from that.

You get these rushes of chemicals in your brains from gambling. Good grief, you see a lot of people with their investment portfolios, they get into a gambling mode.

“Ooh, this fund is really doing this. This stock’s really, really doing well.”

And they start looking at past performance of investment vehicles and going, “Oh, this fund did better than mine.” And all of it’s just a chase after brain chemicals is really what it gets down to.

And they don’t realize it, and they sabotage their whole retirement, whether it be sitting on a couch or … I think about one couple that I knew that, all of a sudden, he discovered the computer after he retired.

She wanted to communicate, “Come in here, get in here, come on. I want to talk.”

And he was like, “No, hang on. I’m checking my email.”

And it was addictive getting on that computer. And what went with that was a lot of dysfunction in the marriage after that point. So that’s interesting.

MS: Sure. And bringing that back to expectations. I think a lot of that can come from when someone is really focused on retirement is just going to fall into place.

It’s just going to be great. It’s this vacation. And then when it actually happens, things don’t fall into place, and it’s not quite what you thought it was going to be.

And it’s just easy to fall into, “What do I do with my time? Well, there’s a TV in front of me.”

It’s kind of the easiest thing in front of you, and just falling into these kinds of habits of just filling time with worthless things, really.

PW: Well, sure. And when you think about when I was talking about dopamine, the brain chemical, where else does it come from?

Well, you can also get it from praying, from exercise, from laughter, from communicating with people, and actually engaging in stimulating conversation. It can come from a lot of other places that are way more healthy.

And a lot of times what we do is we gravitate to the easiest.

MS: Exactly.

PW: Well, it’s hard to go meet with people because their schedules are different than ours, and they’re really busy, or it’s hard to do exercise.

And so what happens is we end up going away from the hard ways of getting that kind of stimulation, to the easy way, which is sitting in front of the TV.

And talking about stimulation, you had mentioned, I remember we talked a little bit about this. You said something about, was it addiction?

MS: Yeah. So that’s another thing that is kind of a dark side of retirement that’s not talked about as much, but it’s actually common for drug addiction to creep up in retirement, particularly with prescription medication.

So maybe they’re not going and smoking a joint …

PW: Right. Feel-good chemical.

MS: Exactly.

PW: Drinking or those types of things, anything to feel good. That makes a lot of sense to me. And the other thing, Michael, the other thing that was coming to my mind is just health issues. What happens as, maybe you get into retirement and things start to ache and there’s—

MS: Sure. And that can be an expectation thing too. And it ties in, if you can’t get around as easily, then it’s a little bit, even more challenging to go meet with people and go out and do things.

And that can be an additional kind of a drain: “I’m not as healthy and it’s not as easy for me to go and do things anymore like it used to be.”

Learn to Adapt

PW: I can certainly see that. I think that the whole, good grief, the last year and a half, has been a lot of that, just getting stuck in … I’ve had people who have retired and they’re like, “Yeah, I went and retired and now he can’t go anywhere.”

MS: Yeah.

PW: So a little bit of that, and some of them have adapted in interesting ways.

I had one person who adapted and she actually got an app on her phone. And the app basically was where you could actually go to live tours in different areas of the world.

And literally these tour guides who are out of work would do this type of stuff. For example, Virtual Trips is what it was called. Virtual Trips was an app she got on her phone and she would go to Tokyo at one o’clock in the morning. And this tour guide was in Tokyo.

So she adapted in that particular way.

And maybe take up hobbies around the house. A lot more people took up cooking. A lot more people took up gardening. I had one lady that showed me the other day.

She says, “Oh, let me show you what I did.”

And she shows me this blanket that she made. Completely with no needles, just using your fingers. It was just really, really interesting. So that was something that she had taken up as a hobby.

People have taken up jigsaw puzzles. That was a big thing that was out there. Painting is another one.

Some people are taking music lessons; you can get online and you can learn any instrument you ever wanted to learn literally right online and do the things that you’ve always wanted to do.

You don’t necessarily have to go and say, “That’s it. I’m not going to do anything,” and hang everything up.

This is the conclusion of Preparing for a Fulfilling Retirement (Part 1). Listen to the next podcast to hear Part 2 of Paul and Michael’s conversation about retirement.

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