The Pension Blueprint podcast video transcript
Episode 10 Transcript
Celine · Michelle Silver · Sandy Martin
Working draft for review. All dialogue is preserved from the supplied SRT, including its original names, wording and punctuation. Speaker labels and changes are inferred from context and need audio verification. Guest greetings remain unconfirmed. Chapter times are provisional SRT positions; the audio offset has not been verified.
0:00 Introduction
Celine: Welcome to the Pension Blueprint. I'm Celine Gervetti, Chief Pension Officer at Omers and your host. Retirement is no longer a finish line. For many, it's the start of something new. So what happens when we let go of the old cliches about slowing down and start asking what this next chapter could really look like? Today I'm joined by Dr. Michelle Silver, Professor and Chair of the Department of Health and Society at the University of Toronto and author of Retirement and its Discontent and Sandy Martin, Advice Only Financial Planner and Retirement Income Expert. Together we'll explore how modern retirees are finding purpose and resilience, staying engaged and redefining what it means to live well in this next chapter of life.
Celine: So let's get into it.
Celine: Hello and welcome to the Penton Blueprint.
Michelle: Thank you for having us.
Celine: I'm so excited to have you both here. I've been wanting to have this important conversation about how we can modernize this thing called retirement. Maybe we can just start by having each of you talk a little bit about yourselves and your background. Sandy, I know you left a really successful career in banking back in 2013 to live a life around your values and so maybe you can talk a little bit about what that actually means and how you went about doing that.
Sandy: Yeah I mean I wanted to live my life all the time and not just on evenings and weekends right and of course in 2013 I had three children under four I want to say although the math is still a little bit hazy but I wanted to be able to manage my own time and also only work with the kinds of clients and the kinds of goals that I found particularly compelling. So I didn't you know when you're in retail banking you deal with the person that comes in and that's great there were a lot of really cool people and lots of you know support that we could give them but I wanted to be able to give that support in a like in a product agnostic way let's say so it could just be what they needed at the time and what I had to give them.
Celine: Yeah sounds like a dream it really sounds delightful yeah sounds pretty good and Michelle Dr. Silver can you talk a little bit about your work as both a professor and a researcher and your focus in on retirement and aging what got you interested in that?
Michelle: Sure yeah so I first got interested in studying retirement when I got to grad school and had to pick a topic I realized that aging is something that had been a part of my thinking for a long time I grew up with a dad who was much older several decades older than my mom and and they divorced and I then spent a lot of time with my dad and with someone who was going through life changes at a stage that was just earlier than friends were experiencing with their parents and at a certain point early in my life my father developed dementia and it was time to sort of figure out how to divide and conquer and think about helping him retire and and that was sort of my role was closing down his practice and I realized that going through the motions of retiring someone made me really interested in what it meant so in grad school I studied that from a quantitative perspective looking at retirement trajectories and then eventually got into qualitative work where I got to ask people like what does it mean to be retired?
3:40 Rethinking Retirement Stereotypes
Celine: I mentioned to you I watched your TED talk from 2020 over the weekend and you really dove into some of the stereotypes about retirement and you put up sort of three different images I think one was a typewriter and another one was you know an old man and you know with a cane and I think a third one was one that we always think about the images of retirement you know to a sitting on a bench with nothing but time there and so why are those images locked in our minds when we think of retirement and why are they problematic?
Michelle: Yeah and that was my real point was to say that we have these ageist and stereotypical assumptions in our head about what it means to be retired and
Michelle: and you know a lot of what we think about when we think about retirement is on these anachronistic ageist assumptions that link chronological age with our abilities or what we can still be doing and getting out of life and so those images I think are you know they they're often used to sell products and to sort of convince us of things that we don't need or that we wouldn't otherwise think of and and my point was to say like let's let's rethink what it means to retire and to age.
Celine: Yeah because we're living so much longer.
Celine: And so thinking about how you want to live your life in different chapters versus this I want to work I want to retire I want to maybe I'll come to you Sandy and ask you are your clients thinking about their future in that way and so this new sort of longevity economy and how do we sort of balance then you know what we want to do in life with the need to save and plan for the future.
Sandy: I mean that is often the thing that people say almost verbatim like how do I live a life that feels good today and that doesn't I mean it doesn't mean like how can I spend all my money today but like how do I balance the resources that I have and the energy that I have and all those pieces between what's right in front of me right now that I'm kind of guaranteed and something that feels like it's way into the future and but I know that it's on me to take care of that so how do I balance those two things in a way that doesn't feel like work work work retired yay
Celine: yeah so are they are people asking are they starting to think financially about retirement
Sandy: I mean this is a very sweeping generalization but the people who are in their you know 40s 30s they're thinking about in fact they don't often like to use the word retirement like it's a good all-purpose term in a sense right but it doesn't actually describe anything in some ways it's like the word love like yes what are you saying actually but most of them are talking about they would use the terminology like financial independence and they're thinking about it now like when's the earliest I can do that when and they don't sometimes even mean when's the earliest I can stop working it's just when can I stop having to earn income in the way that I'm doing it now and be able to craft a life that feels a lot better
6:49 Identity Purpose and the Shift to Spending
Celine: yeah Michelle what are some of the non-financial considerations around retirement that you sort of discovered in your research
Michelle: well certainly the connection between personal identity and what am I doing with my life I've focused in for my first book retirement it's this contents looking at people whose work identities and personal identities were deeply intertwined and a real takeaway was that yes there's a lot of people for whom retirement is a bad word and they don't want to think about it and it's scary it's associated with death it's associated with boredom and you know not something they're looking forward to
Michelle: and there's tons of people who like can't wait and like are just ready to go can I please retire tomorrow or today but this there is a subset of people for whom it's really it really implies beyond the financial aspects it implies like what am I going to do with my life like what brings me meaning and for many what they experience in retirement will have a lot to do with the state that they're in or that their loved ones and those around them are in
Sandy: yeah it's hard to turn on a dime right yeah I mean so financially one of the things that people who retire have a really difficult time with is that is the switch between putting money into my savings is good and taking it out is bad and that take that's not just you can't just have intellectual knowledge of that you have to have kind of emotional connection to the fact that like when I save this for myself and I think the same is true with like purpose and identity you can't just say like okay I retired on Wednesday and now on Thursday I have this booming social life or this other sense of purpose especially if yeah who you are is so entwined in what you do and what your career has been
Celine: how do you get them to think and to switch that mindset between saving saving saving saving saving and now it's okay to spend like this is part of what you need to do when you're retired
Sandy: yeah I mean of course it depends yeah on who the person is which is the joke about financial planners is our first answer is always it depends but in part it can be framing it as an experiment so if you say like okay for the next six months so first it's it's taking people by the hand and making sure that they know about it well in advance so that we're not talking about it as a surprise after the fact but yeah framing it as okay so the first six months we've we've planned for you to be able to spend kind of maybe more than you have ever spent before not dramatically
Celine: which is so scary already
Sandy: yeah scary but like we set this money aside specifically for that it doesn't mean that we have to keep doing it after six months but it's really just to give yourself a period of time to connect what we know because we've done all the planning and we've stress tested it we've tried to see what could possibly go wrong and the feeling of okay I'm spending I'm spending out of my savings it's not getting put in as a paycheck but it sometimes it takes years and years like sometimes you know because I meet with clients over a long period of time and we're in year six and I'm saying you know you can actually still spend a little yeah
10:08 Making Room for Every Generation at Work
Celine: yeah I want to go back to some of the stereotypes around aging and as we are getting older and living longer in Canada and throughout the world and the workplaces are changing and so we have intergenerational workplaces and I still feel like potentially there's some bias there when it comes to older workers even when you think of you know we have a pension plan we have a normal retirement age of 65 and so even that you know that tends to tell people a lot at age 65 you should be leaving the workplace can you talk a little bit about the importance of intergenerational workplaces and some of the things that we should be thinking through
Michelle: it's a big it's a big topic we invest a lot in individuals at early stages in their career if they're lucky enough to get the foot in the door and get a job we are pretty tolerant and patient and you know typically involve training when someone first starts but as people progress in their years they tend to get more expensive as they rise through that ladder
Michelle: and we tend to offer less training and to do less questioning of what they are interested in doing because you know they with experience they learn what they're good at and we often don't ask people and I think employers would do really well to check in with people at different career stages to ask like what what do you think you're good at
Michelle: and that's the beauty of an intergenerational world you know is that we've got people at different stages and we don't often take advantage of the opportunities that are there for people who are later career and might want to be scaling back and practicing retirement or who might want to be doing more and moving into leadership or other other things
Celine: yeah I think it's so interesting because I'm not sure that we're thinking about it yet like I look at sort of all the investment we make in our people and I don't know that we're having those conversations about how do you actually take the spaces to learn from each other and do different things and even go to your point like is there an opportunity to work part-time or take a sabbatical or do some mentorship and just sort of do things a little bit differently
Michelle: even just wearing different hats within an organization there's there's opportunities there that might feel like a break for somebody to be able to like go all in in one aspect of their job but there are really interesting models around the world for engaging mature workers and thinking about transferring people skill sets so that they're doing things that are active but that are paid and that are like totally different than what they did in earlier stages I don't know if those are better but those are models that I feel like within Ontario we could really draw from
13:03 Pensions and Financial Security
Celine: Sandy how important are pension plans tell me when you're when you see clients what are some of the questions that you ask
Sandy: yeah I feel very good about pensions in part right because of exactly what you said people are living longer so longevity risk like the the risk that you might outlive your money is real and if we can have at least some slice of their income from you know inflation adjusted guaranteed often with a piece of survivor benefits if we can have that be part of the floor of their income what it actually I mean the math shows that if you start with the same amount of assets but a certain amount is covered by of your spending is covered by like pension like sources you're able to spend more with more security because you know that your basics not just about kind of mindset but there's also the basic needs are covered or mostly covered and then you're only on you know market linked investments for you know the the nicer things that you could maybe choose to defer in a bad year or something like that so people are able to spend with more security and have more comfortable lives even if they don't have a full pension even if it's just a small slice because it has that guaranteed for life piece to it
Celine: and if I'm someone who does not have a pension what might I be considering with respect to savings for the future?
Sandy: I mean you have to save a lot more the math shows you've got to save an awful lot more I mean in part because a pension whether it's defined contribution or defined benefit has an employer contribution component right so if somebody's contributing 10 out of their own pay and their employer is matching that or sometimes exceeding it depending on the pension plan well it's just I mean right again it's just math like because of it.
Celine: Is there an age that you would say don't even think about this or there are other things that you should be prioritizing before you think about saving for your
Sandy: I mean depends on your life circumstances so there's the it depends again there are a lot of young families in particular who spend a lot of time worrying that they're not saving and feeling as though like saving is the ultimate way or contributing to your investments is sort of the ultimate signifier that you're being responsible but that might not be the case I mean again if especially if you have young children I mean the you know the throw or a phrase sometimes is if you've got kids and you've got a mortgage you've got two mortgages because you don't like child care and all those pieces so there's I mean there's opportunity for strategic you know contributions to RRSPs to all the all the things that we could talk about in terms of child tax benefit and those things but people shouldn't feel bad if they're not able to save or they're in a period of their life where that's just not realistic.
Celine: I think there's so much anxiety around money right now
15:57 Aging Well and Staying Active
Celine: I want I want to dig into that but I want to talk a little bit about your book Aging with Agility and I think what you did in this book was sort of set out to look at a thesis that we could learn a lot from athletes and how they could sort of integrate exercise into this sort of longevity because I think there's sort of a distinction between I guess how long you live and how well you live. Could you tell us a little bit about the findings from your book?
Michelle: Yeah sure so um for Aging with Agility I started with this hypothesis that high performance athletes were going to like give us all the secrets to how to move our bodies well later in life. I had previously done some studies looking at perceptions about aging among athletes and also looking at retirement because I had realized that athletes identify very early in life as retired because you know they do continue on and do other things but their athletic careers tend to end really early in the life course and that some of them really struggled with exercise and you know of course now it seems obvious but many of them told me stories about how you know early life injuries and this really strong competitive drive made it nearly impossible for them to exercise later in life because they were in pain or they had become addicted to painkillers and had you know various chapters of life play out that made it really difficult and
Michelle: then others who maybe you know didn't have those kinds of experiences but who had this association with their sport that was so intense that they couldn't really engage in ways that were relaxing or that were helpful for their bodies and so I kind of came to what emerged from Aging with Agility is really this thesis that we really should appreciate our bodies for the way that they are at whatever stage we're at and try to exercise them to the extent to which we are able to.
Celine: And what distinguishes a happy fulfilled retiree?
Michelle: Oh I think it's just about living your best life whatever that means for the individual.
18:19 Money Anxiety and Consumer Culture
Celine: Sandy so I want to go back to the point of sort of the economy that we're living in right now which feels very very volatile and chaotic and we're talking a little bit before about young people and I feel like young people right now are both interested in understanding money and understanding how to sort of save for their financial future and wealth and I feel like at the same time overwhelmed and not even knowing how to start and many people are struggling just to make ends meet.
Sandy: I do genuinely think that talking about money, making it something that you can have a casual conversation about is a tangible thing. It's even as important as okay put aside 10% of your paycheck or whatever the money centric advice is because I think that shame and that inability to speak openly about oh I you know I got a part-time job and it turns out there's a pension plan and I I don't know what do you know about it or you know the kinds of things that help people make good decisions that are not just you know somebody on TikTok or whatever telling them something that is only in the benefit of the person on TikTok.
Sandy: So I do think that talking about money eliminates a lot of that guilt eliminates a lot of the shame that only really profits people who want to sell you something.
Celine: I think, like, good old fashioned, I look at my daughter, who's 27, and I'm like, and I see the, trying to sort of make it all work, and it's difficult, but I'm like, you are so young. Put a little, like, the compound - if you could put something away every month, and let time go by. And not touch it. I do think there is a bit of old-fashioned, save over years and years and years and don't touch it. Which I guess is harder than it sounds.
Celine: I've been talking a lot about this Instagram world, and reconciling, like, on Instagram, everybody again, I go back to my daughter. Like, everybody that she looks at on Instagram has a designer bag, is vacationing in Ibiza is like having the best weddings and going to dinner every night, and you know, spending $15 on a latte. And how does that reconcile with the fact that we know cost of living is high and cost of rent is high and you need to save for housing. And so I just feel for young people in trying to reconcile, kind of, fact and reality.
Celine: And, to your point, not feeling guilty and having the pleasures in life, but the reality of, you also need to work and save, and not get everything right away.
Sandy: I mean it is in some ways a logical escape sort of a normal response and it doesn't help you get to the next stage where you can do something about maybe those policy issues or like if you can't invest in yourself to be resilient to have a little bit of money set to the side because of systems issues that's one thing but if it's because of like being trained in consumer culture to yeah to buy things to escape the feeling of not having much control or being anxious I think that is doing more harm to yourself over the long term.
Celine: They're hard conversations to have but they're really important.
21:32 Building Your Own Retirement
Celine: I want to end with sort of one takeaway for our listeners and Sandy I'm going to start with you and so if you think of helping people financially plan and prepare for their future what is one tangible takeaway that you'd like people to to get from today's conversation?
Sandy: I would like people to really think about if the if the dream that's put in front of them is one that is theirs or if it's one that has been sold to them so is it you know freedom 55 is that something that you really want
Sandy: and to be realistic about what it is that makes them happy now happy and fulfilled like joy and purpose every day isn't something that we should just aspire to in the future it should be something that we're looking for in our real life every day regardless of what our employment status is so yeah don't don't fall for somebody else's dream make sure you're building on your own.
Celine: I love that. Michelle how about you with all of your research what's a takeaway?
Michelle: Well I would say remember that pension plans were first designed to kick in after the average worker was already dead and so the first pension plan in Germany 1989 was set to kick in at 70 and average life expectancy in Germany at that time was like between 40 and 45.
Michelle: Similarly you know Canada first pension plan 1927 and at that point it was for people 65 and over but life expectancy was well under that at that time and the same is true we can go through each country it's really I think an important takeaway to remember that we're living longer now on average and age has a different meaning than it has in the past your parents retirement is not going to be your grandparents retirement is not going to be what yours is going to look like yours is going to look like what you make of it.
Celine: Yeah so we all need to think differently about retirement yeah that's so great thank you both.
Sandy and Michelle: Thank you thank you.