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“Failure to prepare is preparing to fail” is one of many nifty quotes courtesy of Benjamin Franklin and it inspired several other popular ones about the advantages of preparedness and the necessity of planning.
Feeling younger than your age is a gift—until it leads to financial procrastination. Nowhere is preparedness more crucial than in personal finance. If you plan like you have an extra 10 or 15 years to save and invest, you risk future financial regret. And financial regret isn’t just inconvenient—it can be emotionally draining and, at its worst, lead to self-reproach. The good news? It’s entirely avoidable. Advisors should ask their clients directly how young they feel to identify potential planning gaps and tailor conversations accordingly. By recognizing this mindset early, advisors can help clients stay on track and avoid costly missteps.
In a recent episode of the The Family Financial Conversation, Tom West, a senior partner with Signature Estate & Investment Advisors, LLC, discussed the importance of long-term financial well-being with financial wellness expert Suzanne Schmitt, a Managing Director at NextChapter.
Among the important points highlighted by Schmitt are misconceptions about age and the reluctance of some people to embrace the mindset of 'short-term pain, long-term gain.' In other words, avoiding future financial regret—and even self-reproach—is possible, but it often requires near-term sacrifice. Advisors should make it a best practice to track how clients’ answers change over time as a proxy for healthcare planning, long-term care insurance (LTCI), and other critical financial considerations. By doing so, they can help clients stay proactive and prepared for the realities of aging.
Age Is a Number and It’s to Be Reckoned With
Warren Buffett – certainly someone worth paying attention to when it comes to finances – noted that “father time always wins.” Said another way, we all have (unknown) expiration dates and the older we get, time starts to work against us when it comes to financial planning.
Schmitt explores that point through the age lens, saying that while many of us may feel young or look younger than our real ages, those traits should not be taken for granted. A 50-year-old that looks 42 and feels 32 should not buy into the notion that 50 is the new 40 because, well, it isn’t. Moreover, that line of thinking can lead to financial regret. With some gentle prodding and guidance, advisors can get clients to “act their ages.” Financially speaking, of course.
“This has some pretty significant impacts on our decision making and if financial advisors are trying to give counsel that could improve somebody's life outcomes with the choices that they've got right now, not only do we have to compete with a reduced or a discounted version of our future selves, we also might have to understand that our clients might be thinking and acting younger than they actually are,” said Schmitt in the interview.
Clients’ views on age is increasingly relevant to advisors because as Schmitt points out, the younger a client is, the longer it takes them to feel old. For example, the average baby boomer might delay saying they’re old until they’re in their 70s whereas a millennial might need to reach 80 before considering themselves “old.”
Helping Clients See the Future
No, that doesn’t mean predicting the future and it doesn’t mean voyage on a mythical time travel machine. Rather, convincing clients to make near-term sacrifices today for their long-term financial betterment is a matter of framing – one where advisors need to convey to clients that not all of the decisions made today can be undone tomorrow.
That framing can and should involve conversations about regret. After all, many clients, particularly younger ones, are living for the moment and not thinking about where they’ll be in five, 10 or 20 years. But by peering into future, as hypothetical it may be, regret can be avoided and planning can be enhanced.
“Are they going to be regretting, you know, you may be taking the wrong path?,” adds West. “One technique that I use in my practice when I'm trying to get people to access visions of their future selves, is try to introduce their future selves as people. Like Suzanne, if you're my client, let me describe, what I know about Suzanne as a 75 year old, some years down the road. I'll go through all the attributes that I know and respect about Suzanne now.”