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The Third Stage of Life

Baby Boomers are changing the face of retirement—here's how to cash in.

By Donald Ray Haas, CLU, ChFC, CFP, RFC, MSFS

Several years ago, I noticed what I thought was an anomaly. While counseling a few insurance agents on their personal financial matters, I discovered that they did not want to end their professional careers even though they were at the age when people traditionally do so. In fact, according to the AARP, 80 percent of Baby Boomers polled in 1999 planned to continue working past the normal retirement age.

Millions of Baby Boomers, now in their 50s, will move into their 60s by 2006. They will continue to evolve and redefine every life stage, especially retirement. Whatever this large segment of the population elects to do usually constitutes a trend. Do not ignore this major change in attitude about how you and your clients plan to spend time after the normal working period. If you do, and you fail to understand the Baby Boomers’ attitudes and planning needs, you may miss out on tapping into our industry’s largest market.

The term “retirement” does not accurately describe the last stage of life anymore. Baby Boomers have changed the definition of retirement—from a period of not working, of leisure, of just sitting down and rocking, or of playing shuffleboard—to a time of choice. Twenty-three percent of Baby Boomers say they will keep working because they will need the money—a strong signal that, as financial advisors, we are not doing our job of assisting them to accumulate more wealth.

The stages of life
In addition to the option of continuing to work, many Baby Boomers will want to remain active in sports, travel and volunteering. The definition of retirement will change from a stage of declining health—a phasing-out period until death—to a new stage of life, a third stage. This stage follows stage one, childhood and education, and stage two, working, parenting and continuing education. It is not that period when the Grim Reaper always wins, but simply a third stage when you move on with your productive life and choose what you want to do—not what you have to do.

Benefiting from this trend
As they approach their 50s, Boomers will get a rude awakening when they find out that they have spent too much and saved too little and now need to play catch-up. This will lead to a substantial increase in their accumulation rate. My experience has shown this rate to be 20 percent of gross income—with a larger-than-previous income as they reach their peak earning years. As they age, they will start to realize that it is not possible for them to retire at their ideal age of 55. In fact, the reality is more like 65 to 70 or even 75. High income, a high rate of accumulation and a long period—10 to 25 years—add up to great wealth.

Managing the money
The icing on this money cake is the trillions of dollars Boomers might possibly inherit from their parents and grandparents, who, by the way, might still be around and loving their grandchildren. Who but the trusted financial advisor can properly manage all of these trillions of dollars?

Of course you are up to this task, and it is in line with your personal plans of staying engaged with your clients. Think about it: You can stop prospecting but continue to service existing clients who will be living much longer, need your services more than ever and are happy to compensate you for those services.

Like your clients, you will not be moving into a losing game with the Grim Reaper. Instead, you will simply be moving on to the next stage or the third stage of a productive life. This stage could last longer than either of the earlier stages and be more enjoyable than we hoped for.

Donald Ray Haas, CLU, ChFC, CFP, RFC, MSFS, of Southfield, Mich., has been an insurance agent and financial consultant for more than 47 years. You may reach him at 248-213-0101 or at

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