Troy: Troy Sharpe here, CEO of Oak Harvest Financial Group and CERTIFIED FINANCIAL PLANNER™ Professional (CFP®) . On the YouTube channel we talk to you all the time about the big questions. Do you have enough money? Can you retire? How long will it last? How do you pay less tax, and most importantly, if something happens to you, will your family be okay? This video series, we’re going to launch, we’re going to talk about the psychological component of retirement. I have with me, Lindsey Mitchell, who is a performance psychologist with a PhD in clinical psychology. Lindsey, how are you?
Lindsey: I’m good. How are you doing?
Troy: I’m doing very, very well. We want to explore in this series of videos that we’re going to do the psychological components around retirement. It’s not all money related. A lot of it has to do with our emotions, our fears, our anxiety. We get to this point where we’ve worked our entire lives. Now it’s time to retire. What do we do with our lives? We’re going to explore that today. Lindsay, the thing that really was the impetus for me to want to explore the psychological component of retirement.
Several years ago, we had a client who had plenty of money. No problem, he could retire. We put a plan together. He would’ve had more income than he ever needed. Pay a lot less taxes than what he was going to.
Lindsey: Ideal situation
Troy: He said, “Troy, I’m not ready to pull the trigger yet.” What made this even more confine to me was he lived west of our office. Our office is on the beltway in Houston here Beltway in I 10 and he lived west of us about an hour. He would drive to downtown every single day. He would spend an hour and a half in the car one way in an hour and a half in the car back the other way because he didn’t want to lose his responsibility, his identity. He had no idea what retirement was going to be like. It really got in my brain, the juices flowing. What is behind his decision to sit in Houston traffic for an hour and a half each day, each way, and he did this for almost four years before he actually finally retired. What do you think was going on there?
Lindsey: [laughs] I think there was a lot going on there. I don’t want to sit in traffic for an hour and a half, especially if I’ve got enough money in the bank where I don’t have to. I think it’s interesting. Retirement is such a huge accomplishment. People talk all the time about, ” I can’t wait to retire. I can’t wait until my alarm doesn’t go off,” and things like that, but it’s a huge loss. Like you mentioned, it’s a loss of identity. It’s a loss of power. It’s a loss of control and so many things that you lose along the way.
I think people have a hard time living in both worlds. I can be excited about something and be looking forward to it and also be scared and it can be a sense of, “I’m not really sure what’s next.” We struggle sometimes. I think retirement as a life transition is a little bit more complicated because it’s both. Most people when they have a transition, it’s exciting. “I’m going to have a baby. I’m going to get married. I’m going to go to college. Yes, it’s going to be hard, but I’m excited.” There’s a lot of support along the way. With retirement, we get a little tricky with that.
Troy: In retirement, it’s something that financially we’re hopefully preparing for, by saving money, saving money, saving money. For most of our lives it’s this far off in the distance retirement goal. Then one day it gets there and for many of us we’ve prepared financially by saving enough money to help us get through. For many of us, most of us I’d say, we haven’t psychologically prepared for what that loss of leadership, the loss of responsibility, the loss of identity.
The transition into that next phase of life. We talk a lot with our clients about having a purpose. We’re going to transition into this next stage of life and we need to have a vision for what we’re going to be doing with our time, with our energy. We’ve all heard the stories that those who stay mentally active and physically active live much longer lives.
Lindsey: Something you had mentioned is the living longer and it can also be a challenge too. We used to retire, maybe 15, 20 years we had left. Now as that extends, that can also cause a lot of anxiety of, “Am I saving enough? Am I doing enough? I want to have enough at the end, but I don’t want to have too much at the end that I didn’t get to live my retirement to its fullest.” I think people can get trapped there too a little bit.
Troy: A lot of times people won’t come to see us or any financial professional because there’s a lot of fear surrounding money. There’s an anxiety. “Do I have enough? How long will it last? I don’t want to be judged if I go see a financial professional.” While those feelings are valid in the sense that we have them and that’s okay, we shouldn’t allow them to stop us from seeking the professional help that we need in order to have more abundance in our retirement, to have more income, to have more money for charity, kids, for our spending goals in retirement.
Lindsey: Anybody that thinks– I think I have an easier job as a psychologist. People come to me knowing that we’re going to tap into the emotional side. Still sometimes resistant, but eventually we’re going to get there. I think people have a hard time associating money with feelings and vulnerability. You have that tough job of breaking the ice there. I think if people can come in, it is a tough conversation. It is vulnerable. I might tell you things about my finances that nobody else knows.
That can be really hard, especially when it’s like, ‘I have no idea what retirement’s going to look like. I have no idea what I’m doing. I don’t want to look stupid next to this person that thinks I’m a successful person and I should know.”
I think a lot of times it’s a little bit of an acceptance that with money comes vulnerability, fear and feelings. If you think that you are not experiencing those, I don’t think you’re doing your psychological due diligence in that vein.
Troy: A lot of times when someone goes from a job and they transition into retirement without purpose or without a vision, it can lead to almost an emptiness, where even though, and we see this a lot in Houston, because more than half of our clients are engineers and rationally in and logically, when we work together with them and put a financial plan and it says, “This money’s here, this money’s here. This is how it’s invested. This is how much income we’re going to take. This is how we’re going to pay less tax.” Financially they feel like we’ve got it all figured out.
That’s the rational, the prefrontal cortex telling us that everything’s going to be okay. Then we don’t prepare mentally for retirement, and you get two, three months in and all of a sudden, you’re starting to question, “What am I doing? Should I go back to work?” There’s this almost emptiness for a lot of people. Why is that?
Lindsey: Typically, you’re going to feel that rush. You’re going to have that any transition, be it college. Like I said, being a mom anything it’s like, “I’m excited about it.” People are almost on like a two, three-month vacation. It’s like, “My alarm’s not going off. I’m playing golf, I’m getting to play tennis. I’m having coffee. I have one too many bourbons at the end of the night and I don’t have to worry about getting up early.” You’re going to have that excitement. Then all of a sudden, typically two or three months in, no matter kind of financial situation or not, it’s like “Oh my gosh, this is supposed to be the next 25 years. I don’t have a sense of purpose.”
I love that you talked about that, and that purpose can be anything. Part-time job, volunteering, spending more time doing an activity or a hobby, spending more time with family. Whatever that looks like, I think a purpose is super important. You’ll get that usually two- or three-months in. Then you have a year to 18 months of figuring it out. Sometimes people think when they have to pivot or readjust, they’re doing it wrong. There’s not a right or wrong way. There’s a bunch of different options that we have to choose from and we have to listen to ourselves on what we need in those moments and asking experts for help.
Maybe you’re the engineer that says, “I’ve got it all figured out and now I’m panicking.” I got to go back and say, “Am I panicking because of financial, is it emotional? Is it family? Do I need to reintroduce myself to my spouse that says, ‘Hey, this is what I look like at 2:00 PM and you haven’t seen that in 30 years?'” Then 18 months and you’ll hit your groove typically and you’re communicating differently and you’re owning that new identity.
Troy: From a financial standpoint, there are really two types of people. There are those that do seek professional help and have a financial plan put in place with an income plan, a tax plan and an investment strategy, a healthcare plan and a estate plan.
Lindsey: I hope I’m one of those people.
Troy: There are those that don’t. Either they do it themselves or there’s a lot of fear surrounding money so they try to go it alone. What we find is that, and this is the purpose for this series actually, when we explore the psychology of this, is we want to not just have this conversation, but we want to bring peers in, your peers in that are going through the same fears, the same emotions, the same feelings that you are. Then also people that have just retired or have been retired for a few years and allow you to learn from them.
Hit the subscribe button and hit that little thumbs up button as well, so you can stay connected to the series as we continue to educate and talk about the psychology of retirement. Those people though that have a plan, they have enough income, they have the money where they’re not pinching pennies, where they’re not afraid of running out down the road. Where if it’s a charitable plan or whatever it is, the financial side of things is put in place. Then a lot of times, for people who don’t have that plan or that strategy, we see that when they finally do come to see us because they realize that they’ve waited too long, that they’ve spent the first many years of retirement not spending because they’re afraid of not having enough down the road.
When we put a plan together for clients, the beautiful part is you have the comfort to spend the most amount of money in those beginning years of retirement, when you’re younger and healthy and can travel and can donate and can do the things that you’ve always wanted to do. That helps to provide a lot of peace of mind and a lot of comfort. Whereas those who don’t, they oftentimes pinch pennies and that’s based in fear out of running out of money down the road.
Lindsey: I know for me, having parents that are retired, I don’t want to spend my parents’ money when they’re gone. That’s not really what I want. I think if having those memories and having those moments, but I also can see people not being able to enjoy that if I’m like, “Well, this was a great vacation. I hope that I have enough in 10 years.” I think peace of mind and education] and knowledge. I don’t know that you get that from you if you’re not willing, to be honest, and vulnerable. “Hey, here’s what I want. I’ve got this many kids or this many grandkids or this charitable organization that means a lot to me, let’s talk about it.”
Troy: What’s the psychological route, do you think, or the difference between those who actually do seek, professional help and even people who are very intelligent and they do feel like they can do it themselves to a certain extent? Maybe the investment part, but not the tax part, the income part, the healthcare part. Someone who seeks help and then someone who doesn’t seek help, what’s the psychological difference between those two groups of people?
Lindsey: For the reasons why they don’t?
Troy: Do or don’t? Is there one specific reason why?
Lindsey: Well, I think our society has done a great job of empowering people. We have, internet, social media. We have a lot of do it yourself, that empowering people to do things on their own, which I think is great. I can repaint maybe chest and a drawer and a nightstand and that thing, but I’m not going to build a house. I think it’s about really listening to yourself and being truly honest with yourself. I can do some stuff. I can read a self-help book to get myself maybe through a difficult time. I can look on the internet for articles through grief and loss and manage my day to day. When it’s really starting to impact me adjusting and saying, “It’s okay to ask for help.” I think that’s the hardest part. Weakness we equate with asking for help, but really there’s a lot of strength and a lot of self-awareness. I know that I can do a lot of things by myself, so I’m a very empowered person. I have lived alone for a long time. I can move things I probably shouldn’t be moving. At the end of the day, I’m very aware of what I don’t know. I think it’s that honest conversation of, “This is what I know, this is what I don’t know. I’m okay that I don’t know this.”
Troy: It’s that self-awareness really. Then there’s also this juxtaposition where self-empowerment comes into play. A lot of times we don’t know what we don’t know. Society does make it easy, especially in the investment world. We can open up a brokerage account and buy some mutual funds, but from our experience doing retirement planning, sitting with thousands of families, helping them through that journey, investments are just one part. What we don’t know is the taxes, the income, the estate planning.
Lindsey: Personal experience, you cannot do it on your own. I noticed for sure.
Troy: You had an amazing story that you shared with me before we started recording about a coffee cup and a newly retired couple. This is a great example of some of the emotional things that we go through. Once we do cross that line and the paychecks have stopped, and now we’re in retirement. We have to figure retirement. We have to figure out what to do with our lives. With our spouses, we almost have to relearn each other. What happened with this coffee cup?
Lindsey: It was a client that I worked with and, he was a vice president in the oil and gas industry, been married for a really long time. I was seeing them as a couple, but typically, when I see couples, I’ll see one person first and then the other person, and then we come together. You can truly be honest when your spouse isn’t sitting there. I don’t want people to package it pretty, right? I was talking to the wife and she said , “You know what really irritates me the most is his coffee cup.” I said, “Help me understand that a little bit.”
Essentially she said, “When he was busy and he was working and he was all over the place, I didn’t mind cleaning up after him because I was a stay-at-home mom, very traditional rules at that point, and it didn’t bother me.” Now all of a sudden, he wakes up at 8:30 , we have a cup of coffee. We hang out and then his coffee cup sits there. How hard is it to move it from the living room to the kitchen sink? Shouldn’t be that hard. I find it very disrespectful.” Which was really what she was saying, that she felt disrespected.
Then I talked to him, flip the coin and he says, “I didn’t even know that I left the coffee cup.” I had him walk me through his day. He had two assistants, always running from meeting to a conference call to other meeting and moving conference rooms. He said, “I just blinked and my stuff appeared. I’d never really had to worry about my stuff because I had people worrying for me,” which allowed him to be great at his job.
I said , “You know what? Do me a favor this week and just move your coffee cup, because it’s a sign of disrespect.” He moved it, they came back as a couple. I didn’t fix all the problems, but it certainly helped them understand each other. I think that as a couple partnership, any type of partnership, it’s an understanding. She was saying that everyone was worried about him. “How are you doing with retirement? Are you doing okay?” She’s like, “Over here, my life completely changed as well.” I think sometimes we don’t give due diligence to both sides.
It’s the working person that gets that help or assistance or a big retirement party or whatever the case may be Sometimes the spouse doesn’t get as much understanding of his or her part in it. It’s all about a coffee cup.
Troy: Well, it’s just a perfect example. It’s, as far as we’ve been working our entire lives and now all of a sudden we’re transitioning into retirement. We help people with the financial side of things all the time because it’s a completely different world than the accumulation phase. It’s not just about the finances in retirement. It’s why we’re doing the series. It’s also the psychological component. Not just you though, not just you the person that’s retiring. There’s also a transition for your spouse who isn’t used to seeing you every single day for 24 hours a day.
I would imagine probably professional counseling is probably a good thing for couples in retirement, which I’ve never really given much thought to.
Lindsey: Well, and especially with oil and gas. A lot of travel. You’re not dealing with nine to fivers. You’re dealing with, “I travel, Monday through Thursday.” Now we go from only seeing you probably on the weekends maybe to now all the time.
Troy: One thing we always say in retirement is once you get there, the paychecks have completely stopped, and now you’ve been saving, saving, saving all of your money. Now you’re told to spend it. For many people, that’s very difficult.
Lindsey: Scary too.
Troy: It is very scary because now you have to generate your own pay-checks and the appropriate amount from the right accounts. The psychological side of things. Now you guys are around each other every single day. All you have to relearn each other’s behaviors and almost fall in love again I would imagine, because there’s so much time that’s going to be spent together.
Lindsey: I asked a couple what keeps them married for so long. This woman said to me, “I have to relearn my spouse at every phase. As a young couple it’s one way, and then we have maybe a kid or maybe we get more money. I have to reintroduce myself to my spouse at every turn.” Retirement’s no different than that.
Troy: I had a client several years ago, said, “Troy, I feel like a car that’s been going down the road for 40 years. I’ve been doing the same job for the same company for 40 years. The tread on my tires is running thin. As a car, I feel like I have to pull over on the side of the road and I have to retire.”
Lindsey: What a great example.
Troy: “Get back on the road for this next journey of my life.” He couldn’t have said that more perfectly because that’s exactly what retirement is.
Lindsey: I love that.
Troy: You’ve been going one way for so long. You do have to stop, pull over, retire and then get back on the road and you need to have a purpose and a vision.
Lindsey: Well, there’s some psychological, I think, to that point. “If it’s supposed to be something happy, retirement, then I’m not supposed to feel tired or feel scared. I shouldn’t have to readjust because I’ve been planning for it.” False right? It can be both exhausting and a little overwhelming and also great at the same time. If I don’t give myself the due diligence to pull over the side of the road, something that’s challenging, I’m essentially making it more challenging because I’m trying to use old tires.
I’m trying to use the tires that took me to work, and instead, I want to use some tires and it’s going to take me so somewhere else.
Troy: We tell people all the time, we need to be preparing financially for retirement before we get there. What the purpose of this series is to help you also understand that mentally we need to be preparing for retirement. Once we get there, I imagine there’s probably even more excitement when you do that because there’s not in the back of your mind, this big gray area of, “Oh my goodness, what is my life going to be like? What am I going to do with my time? What is my routine going to be?” Now when you financially prepare for retirement, but then you’ve also psychologically prepared for retirement, I imagine that would bring a lot more satisfaction to absolutely joy to life and purpose.
Lindsey: Absolutely. I have the confidence to say, “I thought this and now I don’t. It can be scary and exciting all at the same time. I think that’s the other point. I don’t want to put a big bummer on retirement that it’s going to be so hard. I don’t think that it’s necessarily difficult. It’s just preparation that needs to be made. It’s exciting. It’s exciting to talk about the money aspect and, “I’ve worked so hard. What do I get to do next?” It’s exciting, but emotionally it can be draining. We also want to prepare.
I want people to be excited about retirement. I want people to reintroduce themselves to their partners because the possibilities are endless. We just have to do our due diligence financially, but also psychologically I think, but it is exciting.
Troy: It is because it’s a brand new road that we’re going to explore.
Lindsey: It’s a new adventure.
Lindsay’s, this has been great. I’m really excited to continue this series. Again, make sure to subscribe to the channel because this is going to be a video series where we’re going to bring in your peers. You may be one year away from retirement, five years, 10 years. Maybe you were just laid off and this has been thrust upon you. You had no idea that you were about to enter retirement. Well, we’re going to interview people and get to the psychological component, the emotions, the fears, the anxiety, the uncertainty. We’re going to explore that. You can be better prepared for this next journey that you’re going on.