A Heart-to-Heart in the Wake of COVID-19
This summer sure felt different than last summer. For many there has been a gradual return to normalcy: a joyful family reunion, a long-postponed vacation or a breath of fresh air without a mask. Yet, as the summer begins to wane we’re reminded how precarious normalcy can be these days.
Considering the turmoil we’ve endured and the unpredictability that lingers in the world, it’s no wonder that some people have found it a bit hard to get their bearings this summer. This seems especially true when it comes to retirement, that is, planning for it and living it.
As a financial advisor for TCI, I’m responsible for helping my clients map out a course for retirement that provides long-term financial security, a course that is updated over time to suit their changing needs. This year, perhaps more than ever, that’s been a challenge.
Lockdowns meant big adjustments in how we work, learn, eat, play, socialize and exercise. Some of those changes might endure, others likely won’t and it is difficult at this point to discern which is which. Meanwhile, there were also radical shifts in the social, cultural, political and economic landscapes. Some of us feel bewildered or even blindsided by these shifts. Others are encouraged and optimistic.
Almost everyone’s emotions are heightened as a result of all the uncertainty. On the one hand, many are jubilant at their newfound freedoms and feel an almost reckless desire to make up for all that was lost during the lockdown. At the same time, others are concerned about new virus variants and the possibility that COVID, with its social and economic disruptions, might dog us for years.
Those are powerful and unsettling sentiments. There are some who want to loosen the purse strings a bit. Travel! Family reunions! Second homes! Major renovations! Outdoor kitchens! Gifts for the grandchildren and other splurges! Others want to continue to hunker down at home, popping their heads up like prairie dogs from time to time to sniff the prevailing winds for danger.
That’s why it seems to me that urging clients to stay the course with a retirement plan that was hammered out in simpler times seems almost, well, dismissive in a way. On the other hand, I’d also caution against any major changes to a retirement plan until the aftershocks have ceased from this seismic event.
After all, we’ve been affected profoundly — and in profoundly different ways — by events in the last year. The world is being reshaped before our very eyes. Everyone is looking at the future through a new lens now. In the months to come, there are important conversations that need to happen with your family — and your financial advisor.
That’s certainly been the case for me. I was likely one of the first cases of COVID-19 in Colorado in 2020. After a short flight from Phoenix to Denver in late February, I came down with a splitting headache and then, rapidly, a host of other symptoms including fever, fatigue and nausea. Thinking I had a bad flu, doctors repeatedly sent me home from the hospital, but my condition worsened to include terrifying symptoms such as bone-deep body aches, difficulty breathing, and heaviness in my chest. Finally, I was diagnosed with COVID in mid-March.
My recovery was fairly speedy and, by virtue of being one of the first to survive COVID in my community, I got to give a survivor’s gift to others who were sick when the virus exploded in Colorado. For nine months, I donated plasma every two weeks at the hospital. We survivors have antibodies that are proven to help some of the most desperately ill patients recover.
That COVID experience did change me. A fit and health-conscious 57-year-old, I was deeply grateful for my health and determined to be more prepared for any crisis that might befall me or my family in the future. It was empowering to have something life-saving to offer those who were gravely ill. Still, I hardly expected to be battered anew this spring by COVID.
Ironically, I had a near-death experience because of the very thing that everyone hoped would end the pandemic: the vaccine. I got my first dose of the Moderna vaccine in late April. Four days later, I was out for a run and suddenly felt short of breath. Like many survivors of COVID, I’d expected some intense side effects after getting the vaccine but the breathlessness persisted alarmingly for ten days. I finally called my doctor and she urged me to go immediately to the hospital.
There, tests disclosed that I’d developed blood clots in response to the vaccine. The CT scan showed a parade of clots from my right leg to my lungs, and I was terrifyingly close to dying from a pulmonary embolism (Research suggests that nearly 25% of patients who’d had a severe case of coronavirus will develop blood clots in their lungs.) I was never admitted to the hospital with COVID, but I spent three days there because of my severe reaction to the vaccine. My reaction to the vaccine was an outlier amongst the millions of doses that have been successfully administered. Fortunately, occurrences like this provide researchers with critical data as they continue to study and improve vaccines.
Nevertheless, recovering from that very close call has been a far more emotionally unsettling process. For one, it sparked a sudden and discomfiting awareness of my mortality. I’ve always been fit and healthy, an optimist who believed wholeheartedly that I’ve got all the time in the world to achieve my dreams and pursue adventures. Time, which had stretched out before me like a languid river, now seems to hurry along a bit more urgently.
When I was in the hospital, I thought about practicalities such as what life would be like for my loved ones if I’d died. Would Laura, my wife, even know how to find all the necessary paperwork to put her life on a solid footing, financially, if something were to happen to me? Suddenly, I felt stripped of the arrogance I’d had about my life. I used to think that the rules–that unforgiving algorithm that tallies up the risks of aging–somehow didn’t apply to me, pre-COVID. Now, I felt more vulnerable. I could see how quickly everything can change.
Time feels infinitely precious now. I’m more deliberate about how and with whom I spend it. I think differently about retirement, too. I love my job which has made it easy for me to brush aside any serious consideration of leaving it. Even though I have a solid financial plan, I had long been pretty vague about setting a timeframe for retirement.
“Maybe in five years,” I’d say, “or so,” the key phrase being the noncommittal “or so.”
Now, I’m beginning to realize I may want a more defined timeframe and I suddenly have a lot of empathy for clients who have wrestled with that same unsettling question.
One thing I know for sure: we’ve all experienced a collective near-death experience over the past year. Mine was actually a pretty close brush. It’s probably too soon to say whether that means a major shift in our lives or whether we’re all just experiencing a hangover. Will we go back to living the way we were in 2019? Are we eager to resume our commutes, committee meetings, business travel? Or have we changed fundamentally?
As a financial advisor, I’ve come to believe that, either way, these next few months are ripe for a series of thoughtful conversations with my clients about how they feel as they emerge into this new post-pandemic world. I knew intimately what their lives looked like before. What do their lives look like now, after? Has anything changed significantly and lastingly?
That’s why I think it would be a good exercise in the next few months or year to lead each client through an introspective re-evaluation of their retirement plans. Fortunately, TCI has a roadmap for that. Every new client undergoes a process during which an advisor asks a lot of questions around three themes: values, time and money. It’s meant to be thought-provoking and we want our clients to dig deep for answers.
What are the values that the new client holds most dear? Security? Charity? Hair-on-fire adventures? What’s a realistic timeframe for retirement and the likelihood of longevity? Lastly, how much money will the client need to be financially secure through very old age?
These will be good issues to revisit in a few months. For many, this past year brought on a sincere reckoning with deeply held values. Some folks may want to make some small changes; others might utterly transform their lives. That might mean spending more down time with loved ones. Or supporting treasured charities with more generous donations. All of which have financial considerations that impact the retirement plan.
Most clients won’t want to ditch the entire plan, I suspect, but they may want to talk about the possibility of shifting some priorities and tweaking the financials. I imagine a host of new considerations, large and small. For instance: Can we afford to do major renovations to the house to host family and friends more comfortably and for longer periods? What about buying a family compound now but leaving a little less for inheritances? Can we afford to be more philanthropic now rather than later?
Fortunately, last year was a financial boon for many well-to-do retirees and well paid professionals. For them, the lockdown meant less spending and more saving because of cancelled vacations, fewer restaurant meals and lower commuting expenses, thanks to work-from home jobs. COVID initially crushed the stock market, but the rebound has been strong. Which gives our clients a lot of leeway in redefining their retirements.
I’m looking forward to lots of meaningful conversations with clients in the coming months, conversations like the ones I’m fortunate to have now with my daughter, who is 12. A few days ago, after walking the dog, we sat down together on the curb outside our house to catch our breath and talk about life. Life is brimming with possibilities when you’re on the cusp of adolescence and a lot of her questions start with “What if, Daddy…”
I think those are the best kinds of questions to ponder.