Decisions about retirement encompass numerous factors, both financial and non-financial, and require careful consideration of the employee’s unique personal needs as well as all of his/her available options. For college and university faculty, non-financial issues - particularly in regard to intellectual and social engagement - may weigh just as heavily into the decision as the monthly payout from the pension plan. As healthcare costs continue to accelerate, the question of who will pay the insurance premiums throughout retirement looms large, and may play a big role in influencing one’s retirement date. Whether phased retirement is available and attractive also becomes an important consideration for faculty members wanting to ease into retirement.
Financial advisors and relationship managers can provide enormous assistance to faculty members as they wrestle with both certainties and uncertainties surrounding retirement decisions. Helping them assess their full financial picture - both before and after retirement - is a critical component of the advisory process. Understanding their non-financial requirements is another essential component of the advisory relationship.
This paper attempts to provide insights into the myriad factors that enter into an individual’s decision-making process. With a better understanding of these factors, advisors and relationship managers can provide more valuable counsel to their clients.
