A recent report from HSBC shows that people across the West -- including the U.S. -- are generally pessimistic about their retirement prospects while those in the East are relatively optimistic. And yet, by every objective measure, citizens in Western developed countries control significantly more assets per capita than their counterparts in Eastern emerging economies. This inconsistency begs the question: Are we ever satisfied?

Specifically, HSBC’s The Future of Retirement report showed that 64% of Americans are concerned they haven’t saved enough for retirement, with 59% expecting  to be worse off than their parents. Conversely, only 17% of Chinese expect to face financial hardships in retirement. Those findings are relatively consistent across Eastern and Western nations.

According to Richard Easterlin, a professor of economics at USC, the difference is all in perception.

Originally published in 1974 and updated just last year, Easterlin authored what has become a highly controversial paper that set forth the idea that beyond the point of meeting our basic needs, the accumulation of more wealth does not necessarily make a person happier or more satisfied with their life.

The reason, he asserts, is because once we can afford to meet our basic necessities, we no longer view wealth in absolute terms, but in relative terms. We begin to compare our lifestyle relative to those around us. If we have an iPod but our neighbor has an iPad, we’re less satisfied.

When it comes to retirement, this paradox becomes clearly evident.

Many of today’s near-retirees remember watching as the previous generation of workers in the 1990s received huge early retirement bonuses. With two decades of stock market and real estate growth in the ‘80’s and ‘90’s, corporate pensions still a rule rather than exception -- and a relatively sound social security program -- the pre-boomer Silent Generation of retirees significantly raised the expectation bar for the next generation.  Not known to shy away from keeping up with the Jones’s, boomers themselves have continued to raise the bar on their expected retirement -- potentially unsustainably.

The question then, is how can you help your clients create a satisfying retirement that may not live up to their previous expectations?  One answer is to help them clearly define their retirement in terms of their personal values and priorities -- which are typically absolutes -- so they can focus on what’s most important to them and not compare themselves to others.

For many people, “retirement” is a nebulous concept that simply means they won’t have to go into a job anymore. The reality is that the transition to retirement impacts just about every area of our lives.

As a result of extensive research over the last decade, experts have identified six ‘key life arenas that need to be balanced and addressed to create satisfaction not only in retirement, but at any stage of life.  Rather than being based on external comparisons, these key life arenas are based on internal values and include:

1. Finding and Integrating a Fulfilling Purpose

2.  Practicing Financial Maturity

3.  Continuing Personal Growth and Development (including Spirituality)

4.  Strengthening Family and Social Relationships

5.  Maintaining Physical Health and Mental Acuity

6.  Developing and Participating in Leisure and Lifestyle Interests

Clearly defining their values, expectations and priorities within each life arena helps both you and the client quantify and plan for specific goals. (For example, strengthening family relationships may have estate planning implications.) It also delineates those goals that are clearly financial versus those that are more personal. By helping your clients understand these issues and plan for their most highly valued personal life goals, you create stronger relationships and more realistic expectations as they look forward to retirement.

Weber writes for Financial Planning, a Source Media publication.

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