In his book “The Prosperous Retirement: Guide to the New Reality”, Michael K. Stein, CFP® was among the first to discuss the non-financial factors that contribute to, or detract from, a successful retirement. Mr. Stein, a pioneer in the field of financial planning, gave very practical financial advice, but the real value of his book was to identify the role that topics such as spirituality, relationships and mental health play in the fulfillment that we experience in our post-career years.
Mr. Stein’s book was released in 1998 – nearly a generation ago, and before the boomers started retiring. The first part of the book discusses how, in the 21st century, the retirement of the typical person in the developed world will be different than any previous generation. His predictions are already coming true. These retirees have more financial resources, but they are also prone to spend more. These retirees are living longer, but they are more likely to receive inheritances from their relatively frugal parents. And these retirees expect to continue the same standard of living they have enjoyed during their working years, spending their time traveling and playing sports such as golf or cycling. In short, people now expect a “prosperous retirement”.
The “Guide to the New Reality” contains mostly financial advice, but as I stated before, the real genius of the book was the way Mr. Stein shows how non-financial concerns will either allow, or prevent, a person from enjoying this potentially prosperous retirement. He uses the visual analogy of a wagon wheel with spokes connected to a hub. The role of how a person manages their finances is the hub of the wheel, and thus is the key to the wheel of retirement turning smoothly. But the wheel itself is supported by the non-financial factors, represented as the spokes of the wheel.
In upcoming blogs we’ll discuss more about these non-financial aspects, especially the roles of volunteering, spirituality and mental health as critical spokes of the wheel.