Location, Location, Location: Where does retirement planning happen?

By asking where a client may be doing their planning and review, an advisor may be able to help those clients towards a more detailed plan, or provide more information so that outcomes of particular choices are easier to visualize.

Over the last few decades, most business leaders have come to accept that work environment affects employee productivity and morale. And many have found that telecommuting, once thought of as a panacea to shortages of office space, actually limits problem solving by removing face-to-face collaboration. From all of this research, it’s becoming clear that where you do work impacts how you do the work.

For advisors, knowing where retirement planning happens may help understand hidden limits an investor or client is facing.  Advisors may find that individual clients delay diving into the fine details of retirement planning without what appears to be a good reason. But if the location of where the retirement planning happens is considered, the limits on that planning might be come clearer.

For many people, errands and personal finance details happen at work. It may be the one spot that is consistently quiet. It may also be that planning away from home removes what might feel like harsh details from the home. What parent wouldn’t choose to crunch the details on their kid’s college plans away from those kids? In fact, results of a survey found that most employees run errands and do online shopping during their 9-5 work time without any recrimination from managers.  Since 2011, there has been a 63% increase in employees who shop online while at work.

Retirement planning should mean more than just setting up a retirement account on the company’s 401(k) plan. But many investors miss that a comprehensive retirement plan includes tax planning, estate planning and risk management. If employees or clients think that retirement planning means sitting down with the family budget and a few paystubs to determine how much can be contributed to a 401(k) this year then they are more likely to skip the finer details. But even if they wanted to dive deeper into risk management of their accounts and plan, where would they do so?

Most clients will want to refer to their company’s retirement dashboards to do basics of retirement planning. And that might be part of the problem of where retirement planning happens.

Many, if not most, large employers have their retirement dashboards on their company’s intranet sites. Even the TSA has their retirement dashboard linked to their intranet sites. While employees may be able to port into intranet sites using virtual private networks (“VPN”) like Citrix or other hosts, not all employees have the hardware to handle a VPN, and many won’t be able to load a VPN on an older computer. If you factor in the push and pull for who has access to a home computer, including children doing homework, the access to a company’s VPN for working on retirement planning may be next to nothing.

The choice of where retirement planning happens may also be limited by how investors see retirement planning. They may think they create one plan that will last for decades, instead of thinking of planning as a longer-term process.  One advisor suggests to her clients to think of planning like dancing: start with a basic plan, and then add more complexity as you learn how to become more capable. Adding on complexity though, might not be able to be done on a lunch break at your cubicle.

If investors or employees are working on retirement planning at home, the timing of that planning may impact the level of complexity they can handle. If clients find time to work on planning after children are in bed, and for some, after elderly parents are situated for the night, the chaos of the day may have removed any decision making resources the client has. Yet, those clients are the ones most in need of a robust, flexible retirement plan.

By asking where a client may be doing their planning and review, an advisor may be able to help those clients towards a more detailed plan. If that planning happens at work, an advisor may be more helpful to a client by providing more information in one hub – by helping clients to not have to search multiple files or websites (bank accounts, paystubs, retirement dashboards) – the time spent by the client will be reduced and that may be able to be applied towards a higher level of planning. For example, including more estate planning or looking towards more risk management. If the planning can only happen at home, an advisor may be able to provide a variety of scenarios to a client so as to make outcomes of potential decisions slightly easier to visualize.

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