….it depends on how you define The New Normal and what your discontinuous future holds in store for you.
“The road that we’ve been on for such a long time, the so-called ‘new normal,’ is coming to an end, because it’s being eaten up by its own contradictions,” said Mohamed El-Erian, during an interview on Bloomberg TV. Mr. El-Erian is the chief economic advisor of Allianz SE. He was describing global political economy attempts to wrestle itself (at least somewhat) from the hands of central banks.
That may work for Mr. El-Erian and economics, but how about for those of us 50 plus who are planning (or not) and living professional and personal lives amidst the current uncertainties?
How about for those of us who are professional advisors (financial, legal, health, career, education) to people After 50?
Joe and Ellen, both 67, are adept at living in the Old Normal. Joe works in sales for a small, specialty pharmaceutical firm. Ellen, a nurse, stopped working when their children were toddlers and never got around to going back to work because she was always so busy. Now they have grown children, Joe’s long term employment, a house, preferences for their retirement, and about 1/3 of what they will need for retirement already saved (plus Social Security).
Of the several Old Normal life tools, their favorite is problem solving:
- define the problem
- create solution action steps
- execute the action steps
- get to the solution
- move beyond it forever
Among Joe’s and Ellen’s professional advisors is their Financial Advisor, Phil, age 52. Over the past 15 years, Joe and Phil have done a good job of managing their money. Ellen has been advised but didn’t get very involved. Phil, a hardworking and trustworthy professional, also loves problem solving:
- How old are you now?
- At what age do you want to retire?
- How long can we expect you to live?
- How much money will you need each year after work ends and before the end of your life?
- After Social Security and current savings/equities, how much remains to be saved per year until you retire so that you have the retirement money you need?
- Which investment products/programs best meet your need for safety, growth, and return?
Framed this way, it all seems manageable and quantifiable, although the dollar amount remaining to be saved for age 75 retirement is daunting. If they just execute on the investment plan everything will be fine.
What Joe, Ellen, and Phil don’t know is:
- Joe will be diagnosed with an aggressive, terminal cancer in 4 years and be gone in 7 months, leaving substantial hospital bills after health insurance pays the majority of the costs.
- Joe’s and Ellen’s divorced daughter and her children will come to live with Ellen for a transition time. The daughter will be working on earning a college degree that will qualify her for better employment.
- Phil will have a major job educating Ellen about where her money is and how to work with him to manage it well. Ellen will need to be financially literate.
- Ellen will have to go back to work but will require substantial retraining first, even to do home health care for the elderly.
- Joe’s shares in his employer/company will be worth far less than expected due to litigation over pricing and efficacy issues.
- Ellen and three widowed, long-time friends will buy a home together and form an intentional community for support and expense sharing.
- Ellen will live to be 102. She will outlive her daughter.
What makes this much more New Normal than Old Normal? The Answer: Little in life can be defined as a problem with a solution that actually results in a permanent resolution. Instead, Ellen, Phil, Joe’s and Ellen’s daughter, and the other members of Ellen’s intentional living community will have to:
- Regularly stop and substantially rethink their situations and the next smart steps.
- Remember that each day and week will require proactive effort on their parts. Anything akin to being on retirement cruise control won’t work.
- Make ongoing course corrections and small to large decisions without knowing what the future holds.
- Adjust their thinking to include a big emerging reality: the increased likelihood that they are going to live longer, requiring up to date professional skills, extended work-for-pay that might or might not be configured as a job, and the ability to finance and enjoy a longer life.
How much of the New Normal is emerging in your life? How is it showing up? What are ways you have found to adjust to it?